Commons Sitting of 20 July 2000

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS

    MERSEY TUNNELS BILL (BY ORDER)
    Order for Second Reading read.
    To be read a Second Time on Thursday 27 July

    STANDING ORDERS (PRIVATE BUSINESS)
    Ordered,
    That the Amendments to Standing Orders relating to Private Business set out in the Schedule be made.

    SCHEDULE
    Table of Fees

    line 2, leave out '£3,500' and insert '£4,000'.

    line 3, leave out '£3,500' and insert '£4,000'.

    line 23, leave out '£3,500' and insert '£4,000'.

    line 29, leave out '£1,750' and insert '£2,000'.

    line 35, leave out '£1' and insert '£1.60'.—[The Second Deputy Chairman of Ways and Means.]

Oral Answers to Questions
  TREASURY
  The Chancellor of the Exchequer was asked—
  TREASURY

    Working Families Tax Credit
    Mr. David Watts: How many inquiries have been received by the working families tax credit response line from the north-west region. [130128]
    Mr. Richard Burden: If he will make a statement on progress with the implementation of the working families tax credit. [130130]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Up to 30 November 1999—the end of the first phase of television advertising—the response line handled 89,000 inquiries from the Granada Television region. In total, more than 3 million calls have been received on our response and helplines, and more than 1 million families are now receiving working families tax credit. Already this is almost 230, 000 more than the number who were receiving family credit, even at its peak. Some families are £50 a week better off, and 110, 000 families are receiving help with child care costs. That is twice as many than under the old system, and it is making work pay.
    Mr. Watts: I thank my right hon. Friend for his response. Does he agree that this initiative has been one
    520
    of the most positive ways of getting people out of poverty and into work? What does he think about the Opposition's proposals to scrap this tax credit? Does he believe, like me, that that would put people—
    Madam Speaker: Order. It is not the Chancellor's business what the Opposition's policies are.
    Mr. Watts: I will try again, Madam Speaker. Does my right hon. Friend agree that if the tax credit were to end, it would put many families into poverty and increase unemployment?
    Mr. Brown: I am grateful to my hon. Friend for the careful way in which he words his question to me. It is true that 1 million families are better off; it is true that they are £24 a week better off, and it is true that if working families tax credit were taken away, that would effectively be a tax rise of £24 a week for the poorest families in the country. We invite the Opposition to tell us what they would do. I understand that they would abolish the new deal and working families tax credit. They would make people unemployed, and they would make people in work poor.
    Mr. Burden: Although I realise that my right hon. Friend has no responsibility for the Opposition—it would be quite wrong if he had—will he comment on any advice that he has received, for instance from the Dimbleby programme in 1998, when I understand that the Leader of the Opposition said about the working families tax credit, "We wouldn't do it."? Given that more than 2,500 families in my constituency stand to benefit from the working families tax credit, will my right hon. Friend tell me whether he would follow that advice or stick to our current line of tackling poverty, not ignoring it?
    Mr. Brown: I understand my hon. Friend's concern to point out the virtues of the working families tax credit. It is, after all, similar to the earned income tax credit in the United States of America. If Ronald Reagan could support the working families tax credit through the earned income tax credit, it is quite surprising that the Conservative Opposition have moved so far to the right that they cannot support it.
    I understand that the shadow Chancellor has made a decision that he will not make a spending commitment to support the working families tax credit or the new deal. I understand also that he has been prepared to give the figure of £16 billion as the public spending cuts that the Conservatives would impose. I understand also that there is now a regional breakdown of those cuts. The Conservatives have even issued press releases for their candidates on this matter. I understand also that "The Common Sense Revolution" is being pulped today. We knew that it was fiction—now we know that it is pulped fiction.
    Mr. Michael Portillo: But is not the working families tax credit fundamentally misdesigned? Families have to give intimate details about themselves to their employers. The money does not go to the parent who looks after the children, and it may never reach the children. It is the Chancellor of the Exchequer who proposes to abolish the scheme in two years' time. Is that not the substance behind the spin?

    521
    When the Chancellor made his spending review statement the other day, why did he not tell us that the election war chest had been collected from taxing the least well-off families in our society? Is it not deplorable that it is the poorest fifth of our society which has faced the largest increase in tax under this Government? The Government take the money that people have earned for themselves, churn it around the system, and give some of it back to them in the form of benefits so that the Chancellor of the Exchequer can get the credit and take the moral high ground.
    I know that the Chancellor is not a fan of the Prime Minister's memos but, to borrow a phrase from one of them, would it not be bizarre to believe that any Government in which he was Chancellor could be thought of as pro-family?
    Mr. Brown: If the shadow Chancellor wants to help the low paid, why would he abolish the working families tax credit? Why would people be £24 a week worse off? Why would he abolish the new deal? Why did the Conservative party not support our 10p basic rate of income tax? I know that the shadow Chancellor does not want to answer any questions about his public spending cuts guarantee, but perhaps when he stands up again he will explain, bearing in mind the document that was produced by the Conservative party only yesterday, where the public spending cuts would be made. He has said that there is a difference of £16 billion between the 2 per cent. that he would finance and 3.3 per cent. He has even had his party break it down in regional terms. Now he must tell us where those cuts will fall.
    The right hon. Gentleman broke his promises on tax after the election in 1992. The Conservatives have now had to break their promises before the election.
    Mr. Portillo: It is perfectly clear to me that even the Chancellor does not believe that all that bluster will be believed by working families. Is he aware that the polling organisation ICM conducted research in his constituency on Tuesday night, after his statement? The responses make interesting reading. Three per cent. of the Chancellor's constituents believe they are being taxed less; 48 per cent. of the Chancellor's constituents believe they are being taxed more; 79 per cent. of the Chancellor's constituents say that public services are not improving—[HON. MEMBERS: "Ah!"] Wait, it gets better. Seventy-two per cent. of the Chancellor's constituents say they do not believe the spending figures that he promised on Tuesday.
    Even the Chancellor's constituents can see through the spin. Even they know that they have been taxed more and that the Chancellor has delivered less; they do not believe a word that he says.
    Mr. Brown: It is getting more and more expensive for the shadow Chancellor to ask me a question. He now has to hire an opinion polling agency before he comes to the House.
    Will the right hon. Gentleman answer the question that I put to him on the Conservatives' £16 billion of public spending cuts? [Interruption.] The Opposition are getting very agitated. Last night during the debates on the Finance Bill, they voted £ 1 billion extra in tax cuts simply for
    522
    double taxation relief and national insurance on share options. The total bill from the Finance Bill alone is extra tax—extra revenues that have to be raised—of £5 billion.
    Will the shadow Chancellor answer the question? The Opposition had—[Interruption.] They do not like it. The Opposition had five guarantees. Where will the cuts fall—on health, education, transport, social services, defence, or law and order? It is about time that the Conservatives gave the country an answer.
    Mr. Dennis Skinner: I was just listening to those polling figures. There was one figure of 3 per cent.; one of 48 per cent.; another of 79 per cent. and another of 72 per cent. Those figures demonstrate clearly that when we get more than 200 per cent. voting, that is as phoney as the shadow Chancellor and a £9 note.
    Mr. Brown: It certainly does not add up. When the shadow Chancellor still had his tax guarantee and he wanted to prove that the economy was doing well, he went around the television studios saying:
    Well, governments are in a strong position when the economy is doing well, there's absolutely no denying that.
    He also said that
    fortunately, the national finances are good enough.
    He then said that we had an absolutely reliable anti-inflation strategy.
    The shadow Chancellor has been going around saying that the economy is doing well. He now tries to tell us that our spending figures are unsustainable. I put it to him that the last Chancellor who said that our spending figures were unsustainable found that his position was as well.

    National Health Service
    Mrs. Caroline Spelman: What discussions he has had with the Secretary of State for Health on the implementation of the national changeover plan within the national health service. [130129]
    The Financial Secretary to the Treasury (Mr. Stephen Timms): The implementation of national changeover planning in the public sector is overseen by a committee of Ministers, which is chaired by my hon. Friend the Economic Secretary, who is attending today's European Union Budget Council. The interests of the NHS are represented on the committee by the Under-Secretary of State for Health, my noble Friend Lord Hunt.
    Mrs. Spelman: The Government pledged to make savings of £100 million on NHS bureaucracy. Will the Financial Secretary confirm that nearly all of that will be negated by the national changeover plan?
    Mr. Timms: No. That is certainly not the case. All parts of the public sector need to undertake analysis and planning for the possibility of UK entry to the single currency. If there is a clear and unambiguous economic case for Britain to participate, we want to be able to do so. The work being undertaken by NHS trusts is a small task and can be managed well within existing resources.

    523
    There is a proposal floating around which should worry the hon. Lady very greatly, given her concern—which I know is genuine—for the health service, and that is her party's policy to make £16 billion of spending cuts.

    Savings
    Mr. Ian Bruce: What his policy is on encouraging people to save. [130131]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): We are extending opportunities to save through our policies for a stable, low-inflation and growing economy, with rising real living standards, and through the extension of the lop rate of tax, the success of individual savings accounts and action to tackle financial exclusion.
    Mr. Bruce: I am sure that the House will be surprised that the Minister did not actually say that the Government have no policy to extend saving, as the savings proportion of people's income has gone down from 10.6 per cent. to 3.8 per cent.
    Can the right hon. Gentleman perhaps tell the House something that might be simpler for him to explain? Every year £5 billion pounds is now being taken out of people's pensions and the pensions of future pensioners. How much is that contributing to the enormous slash in the amount that is being saved by the nation?
    Mr. Smith: As the hon. Gentleman should well know, the dividend tax credit was ended precisely because it provided a perverse incentive to the distribution of profits in dividends rather than as re-investment. Not only all shareholders but particularly future pensioners will benefit from the economic growth that will be derived from the levels of investment that will now follow. As for our record on savings, the hon. Gentleman seems to overlook the success of ISAs, which the Conservatives derided when we brought them in. In the first year of their introduction, £28 billion was invested in more than 9 million accounts—one third more than went into PEPs and TESSAs the year before.
    Mr. Jim Cousins: May I pursue the point about ISAs? My right hon. Friend is absolutely right to say that they are now being opened by people in parts of the country and from parts of society who never had a savings habit before, and that they are encouraging and incentivising that habit. May I urge that the £7,000 limit on ISAs, which was extended from one year to two, be extended for a third year and made a permanent feature of the ISA system, so as to encourage that growth in ordinary people's savings throughout their lives?
    Mr. Smith: My hon. Friend is quite right. Many people in our country were excluded from prosperity and from the chance to save under the previous Government but they now have the opportunity to benefit because we have a million more people in jobs, because of the help through the working families tax credit and because of the way in
    524
    which ISAs respond to their needs. We are helping them further by tackling financial exclusion, for example by encouraging credit unions. As to my hon. Friend's proposal for the extension of the £7,000 limit, all advice for the Budget is gratefully received and I am sure that my right hon. Friend the Chancellor will give it due weight.
    Mr. David Heathcoat-Amory: Why does the right hon. Gentleman have such difficulty in recognising his own figures? Is he aware that the Treasury's own published documents record a collapse in the proportion of savings as a percentage of national income, from 11 per cent. when the general election took place to 7 per cent., then to 5¾ per cent. and now to less than 4 per cent.? In the real economy, rather than the economy inhabited by Treasury Ministers, that is extremely serious and has very damaging implications for the long term. It is attributable to the £5 billion a year raid that the Government are carrying out on pension funds, which they started in 1997 and which is still under way. Will the right hon. Gentleman now admit his own figures, agree that there has been a collapse in private savings and tell us what he is going to do about it?
    Mr. Smith: The right hon. Gentleman would do well to recall that the savings ratio fell to a lower proportion under the previous Conservative Government. He would also do well to understand, as I am sure that he does, that the savings ratio necessarily reflects spending patterns which themselves reflect the low unemployment, strong earnings growth, low interest rates, low inflation and strong growth in wealth that we are seeing in the country right now. Talking of figures and them adding up, the question that he and his right hon. and hon. Friends have to answer is from where the £16 billion of spending cuts will come. They will not help savings.
    Mr. Roger Casale: Does my hon. Friend agree that one of the best encouragements that the Government have given to savers has been to create a strong and stable economy and to put in place measures to safeguard economic growth in the medium to longer term? Of course, extra incentives may be necessary for individuals and families to save even more, and the Government are putting those incentives in place, such as employee share ownership plans, ISAs and stakeholder pension schemes. But a return to boom-and-bust economics, which would certainly accompany the return to office of the Conservative party, would destroy the secure savings environment on which the take-up of such incentives depends.
    Mr. Smith: My hon. Friend is right. Nothing would damage the prospects of prosperity and future savings more than a return to the chronic short-termism and boom and bust of the previous Conservative Administration. Conservatives would do well to remember that under our spending plans, as set out this week, for every extra pound spent, only 17p goes on social security and debt interest. Throughout the Conservatives period in office, 43p went on social security and debt interest. There could be no clearer sign of how we are ensuring stability and steady growth. The extra money that we are able to spend goes to front-line services, and the Opposition still cannot say where they would find their £16 billion in cuts.

    Single Currency
    Mrs. Ann Winterton: What his policy is on promoting potential membership of the single currency in advance of an assessment of the five economic tests. [130132]
    Mr. Nick St. Aubyn: What recent discussions he has had with the Secretary of State for Foreign and Commonwealth Affairs about his policy on the single currency. [130136]
    The Chancellor of the Exchequer (Mr. Gordon Brown): I meet Cabinet colleagues to discuss a range of issues. The Government's policy towards the single currency has not changed and will not change. We recommend joining a single currency only if it is in our national economic interest to do so, and if the economic case for the UK joining is clear and unambiguous. The Treasury will make another assessment of the five economic tests early in the next Parliament.
    Mrs. Winterton: Does the right hon. Gentleman agree that before promoting potential membership of the single currency, full consideration should be given to the constitutional and political implications of joining? Does he further agree that a Government who give away control of their currency lose control of their economy and cannot therefore govern the country?
    Mr. Brown: I take it that the hon. Lady never wants to join the single currency, and that that is her position. It is unfortunately not the position of the Conservative party, which on principle would rule out the single currency for one Parliament, but would not do so for ever. Our position on the constitutional issue was set out in full in my 1997 statement. We discussed and examined the issue, which is a factor in the decision. We do not believe that the constitutional issue is an insuperable barrier to joining the single currency if the economic conditions are met and if there is a referendum of the British people. If the hon. Lady is saying that she would never join the single currency, she will have to persuade the Leader of the Opposition.
    Mr. St. Aubyn: The Chancellor has just told the House that the Government's position on the euro "has not changed and will not change." Why was it that when the Foreign Secretary came to the House a month ago to make a speech on the Government's position on the euro, he was forced to change it only minutes before he delivered it on the personal insistence of the Chancellor? Does not that show that the question of a referendum will not be decided in the national interest by the Government? Instead, it will be put forward on the basis of personal rivalries and petty jealousies which divide the Government from top to bottom.
    Mr. Brown: If we are to talk about consistency, let us consider the hon. Gentleman's general election manifesto. He now poses as someone who is completely against the single currency. He even doubts whether a referendum would be fair. What did he say in his manifesto? This was his proposal:
    Anchor the euro-currency option, with our pledge of a national referendum.
    Mr. Alan W. Williams: May I congratulate my right hon. Friend on his excellent management of the British economy? On the single currency, does he agree that interest rates and the exchange rate are vital considerations? On interest rates, there has been considerable convergence, but there is some way to go. On the exchange rate, the euro has strengthened 8 per cent. against the pound in recent months, but it remains substantially undervalued. Does he agree that the exchange rate, in particular, is a vital factor that we must take into account when we take our decision on the single currency?
    Mr. Brown: I am grateful to my hon. Friend. I know of his particular interest in industry in Wales and I understand the difficulties that exporters, especially those in the manufacturing sector, face. I also understand the particular difficulties of the steel industry in Wales and elsewhere. He will agree with me that what manufacturers want least of all is a return to the stop-go policies of the past. After all, those policies killed 1 million manufacturing jobs at the beginning of the 1990s and made for record numbers of repossessions. In the years that the shadow Chancellor was at the Treasury, we had 15 per cent. interest rates, a £50 billion borrowing requirement and, in 1992, 22 tax rises. He is now going to have £16 billion of public spending cuts in 2000 if he gets his way.
    Mr. David Taylor: Given that, under the gold standard, Bretton Woods and the exchange rate mechanism, we always had the right to come out if circumstances changed—as they did and as we did—does my right hon. Friend agree with the previous Chancellor who said that any future decision to abolish the national currency would for all practical purposes be irreversible and that, if things went wrong, we would just have to lump it? How strong a risk does my right hon. Friend believe there is of that happening?
    Mr. Brown: It is the importance that we attach to this issue that has led us to say two things. The first is that the decision must be made in the national economic interest, and that is why five economic tests are to be applied. We will consider the matter early in the next Parliament. Secondly, we have decided that there would be a referendum if a recommendation was made and, therefore, any recommendation would come before the Cabinet, the House of Commons and would then go before the country. That is the right way of approaching this issue. It is quite ridiculous to say that one is against the principle of a single currency for one Parliament only and to refuse to be able to put the arguments for ever, but that is what the Conservative party wants to do.
    Mr. Matthew Taylor: While the House ponders why the Chancellor feels he should answer questions on the euro this Question Time when he did feel not able to answer them last time, and given that the Prime Minister has reportedly let Ministers off the leash to make the case for the euro, perhaps the Chancellor will tell us why he believes that Britain should join the euro in the right economic circumstances?
    Mr. Brown: The unfortunate thing about the position taken by the hon. Gentleman is that he would rush into

    527
    joining the euro without making a proper assessment of the economic tests. I believe that it is in the national economic interest, when a serious decision such as this is being taken, to do it properly by examining all the economic issues. The economic tests affect employment, investment and every individual sector of the economy. They also affect the flexibility of the economy and the durability of convergence. I would have thought that, if the Liberal Democrats were concerned about the future of the economy, they would want us to take exactly that approach. That is what we shall do.
    Dr. Nick Palmer: Does my right hon. Friend accept that there are three intellectually respectable positions on the euro? The first is to commit to joining immediately as the Liberal Democrats favour; the second is to oppose it on principle, as a section of the Conservative party favours; and the third is to enter it if it is in Britain's best interests and if the currency is a success, as is our policy. Has he given any consideration to including as an option the official Opposition's policy of ruling the euro out for whatever the length of the next Parliament will be—be that one, two or five years—and does he see any intellectual coherence in that?
    Mr. Brown: The right course of action is to consider the matter in terms of the economic interests of the country and to make a proper assessment early in the next Parliament with a view that, if an assessment recommended yes, the Cabinet, the Government and then Parliament and the people would make the final decision. What is not respectable is the position of Conservative Members because the shadow Chancellor is on record as saying that a single currency
    would mean giving up the government of the UK. No British Government can give up the government of the UK. That's impossible.
    However, a few months later, on "Breakfast with Frost", he said:
    No I wouldn't say I'm a never man.
    Mr. Tony Baldry: Does the Chancellor accept that there is not a single Member of this House who believes that the economic tests are anything other than entirely politically self-serving? There is not a single Member of the House who believes that a decision on a referendum will be made on anything other than political judgments. Would it not be far more politically honest and far more in the public interest if the Labour party were to say that if it won the next election, there would be a referendum on the single currency in the lifetime of the next Parliament? The policy that the Government are currently pursuing is bringing not only the single currency but the Labour party into discredit.
    Mr. Brown: It is precisely the ill-thought-out views of hon. Gentleman that led the previous Government to join the exchange rate mechanism in the wrong conditions— [Interruption.] Conservative Members now want to blame us for the ERM. My goodness, we are learning a lot today. All the decisions of the previous Government are now the Labour Government's fault. The shadow Chancellor wants us to forget that he was at the Treasury between 1992 and 1994. The failure to think things through in the necessary detail and to apply the economic tests that we are applying led the Conservatives into the difficulties that
    528
    caused the exit from the ERM when the shadow Chancellor was at the Treasury. We shall not repeat that; only the shadow Chancellor would.
    Mr. Michael Portillo: My hon. Friend the Member for Banbury (Mr. Baldry) was absolutely right to ask that question. Regarding the five economic tests, does the Chancellor accept that judging whether the British economy is sufficiently flexible to adapt to change is wholly a matter of opinion? Whether or not joining the euro would help long-term investment is merely a matter of debate. The impact of joining on financial services in this country is a matter on which views are hotly divided. Whether or not joining would be good for jobs is a matter of dispute.
    Does the Chancellor believe that those tests, which are merely matters of opinion, can be taken seriously by anybody? Are they not just a means of allowing him to stall now, so that if the Labour party wins the election, he can take an arbitrary, ideological decision to scrap the pound.
    Mr. Brown: I thought that the shadow Chancellor would answer the point that I put to him. If it is in the economic interest to join, we would consider doing so, would apply the five tests and put the matter to a referendum. The decision will therefore be made in the country's economic interests. The five tests refer to employment—which I would have thought the right hon. Gentleman was concerned about—investment, all the sectors of the economy, the flexibility of our economy and the durability of convergence. That is the right way in which to make the decision, and then put it to the people, if that is our recommendation.
    The position of the shadow Chancellor and his hon. Friends is not respectable. He has said:
    I can't see the circumstances in which I would be in favour
    of a single currency. However, a year or two before that, the shadow Chancellor told the Welsh Conservatives:
    Keep our options open on EMU.
    He said that that was best for Britain. Sooner or later, the shadow Chancellor will have to answer questions, not only about £16 billion of spending cuts, but about the euro. Is he for or against the euro in principle? We have made our decision and are for the euro in principle, where the benefits in trade, investment and jobs are shown, and we will put it to the economic test. The question for the Conservatives, who have not got past first base on this issue, is do they oppose the euro in principle, or do they support it? Yes or no?
    Mr. Portillo: It is really disgraceful that the Chancellor of the Exchequer will not answer questions on the economic tests. I would have thought that he had more intellectual self-respect and I really do not know why he is so unrelaxed when he talks about the euro.
    I could say:
    All we are trying to do is talk about Europe in an open, democratic and adult way. How can anyone object to that?
    Those are the words of the Northern Ireland Secretary. The Chancellor seems determined today to deny the British people a proper debate on this most important

    529
    issue. I do not often agree with the Northern Ireland Secretary, but was he not absolutely right to describe the Chancellor as neuralgic on this subject?
    Mr. Brown: One normally starts a debate by saying where one stands on principle. Do the Conservatives support the single currency, or oppose it? Do they believe that the constitutional issues are an insuperable objection, or not? Do they believe that the economic tests matter, and that if the economic conditions were met they would join? Would they put the issue to the British people in a referendum? Those are four questions that not one Member of the Conservative Front Bench can now answer, because while they do not rule out the single currency in principle, they rule it out for the next Parliament and want to imply that they have ruled it out in principle.
    We will make the five economic assessments, and we will put the matter to the British people if our decision is that yes, we could join. We have already stated where we stand on the principle, on the constitutional issue and on the question of whether the economic conditions are met. I ask the shadow Chancellor again: does he support the euro single currency or does he oppose it—yes or no?

    Tax System
    Dr. Lynne Jones: What proposals he has for simplifying the tax system. [130133]
    The Paymaster General (Dawn Primarolo): We continue to support the tax law rewrite project, which aims to modernise direct tax law and make it clearer and easier to use. The first rewrite Bill will be ready for enactment by the end of this year.
    Dr. Jones: I thank my hon. Friend for that answer, but rewrite is not the same as simplification. The House has just completed consideration of the Finance Bill. I must confess that I have not studied its 742 pages to the extent that I am sure other Members have, but I get the impression that successive Governments have introduced Finance Bills that have made the tax system more complex. Most have paid lip service to the need for a less complex system, but none have set up a mechanism with clout for addressing the issue. I invite the Government to set up such a mechanism, preferably involving Members, who should be given adequate resources for this important job.
    Dawn Primarolo: If my hon. Friend had studied the Finance Bill, she would have seen that at least one measure removed more than 40 pages of highly complex tax law. I am sure that she will also appreciate that when a Government approach tax law, they have to balance fairness with simplicity and understanding for the taxpayer. In today's complex world, another issue that Governments have to address is the activities of the tax planning industry, which spends all its time trying to circumvent tax law and avoid paying the levels of tax that Parliament had intended should be paid, so anti-avoidance legislation becomes increasingly complex.
    The tax law rewrite project considers how to simplify the drafting of legislation, and the Government are reviewing how we can ensure that our legislation is simpler and easier to understand, while addressing the issue of fairness in the tax system.
    Mr. Michael Fallon: Is the hon. Lady aware that only new Labour could describe 15 separate rates of capital gains tax and 21 separate rates of company car tax as simplification? Why does she think that every business organisation now complains about the tax complexity and red tape imposed by the Government?
    Mr. Dennis Skinner: We have just got rid of 5 million files.
    Dawn Primarolo: I know that we are nearing the end of the Session.
    The hon. Member for Sevenoaks (Mr. Fallon) is saying that he is opposed to the lop rate of capital gains tax and to the way in which the Government have reformed the tax system to encourage long-term investment. Is he seriously suggesting that the previous system of capital gains tax, with all its indexation, was somehow simpler?

    Gross Domestic Product
    Mr. James Clappison: What proportion of gross domestic product was represented by net taxes and social security contributions at the latest date for which information is available. [130134]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): The Treasury updates its fiscal and economic forecasts and the ratio of tax receipts to gross domestic product twice a year, in the Budget and the pre-Budget report, and most recently in the Budget Red Book, which showed the share falling from 37 per cent. of GDP last year to 36.9 per cent. this year and to 36.7 per cent. in 2003–04. As the Chancellor said on Tuesday, the combination of a stronger economy leading to higher revenues and £4.5 billion lower spending meant that the net debt repayment last year was not £11.9 billion, as we said at the time of the Budget, but £18.1 billion.
    Mr. Clappison: Can the Chief Secretary tell us whether the tax burden now is greater or less than it was when the Government came to office?
    Mr. Smith: The figures are set out in the Red Book for the hon. Gentleman and the world to see. It is clear that the tax burden is falling. Moreover, the day after the Budget, the shadow Chancellor said on the "Today" programme that
    the Red Book which is the document that accompanies the Budget shows that the Government expects the tax burden to fall during the next parliament, which is exactly what we expect.
    Mr. Geraint Davies: My right hon. Friend is aware that borrowing is a third form of taxation. When one adds taxation and borrowing as a share of GDP when the Tories left office, it was almost 2 percentage points higher than it is now, which is equivalent to some £19 billion of expenditure or 7p on the basic rate of tax. Is it not the case that the current Government can spend more and tax less because there are an extra 1 million people in jobs, because we have replaced the chaos and calamity of the Tories with the stability and success of the Labour party?
    Mr. Smith: My hon. Friend is right. The previous Administration wrecked the public finances, doubling

    531
    borrowing, so that for every extra pound that they spent, 42p went in debt interest and social security, whereas we are now able to get that down to just 17p, so that we can put more than 80 per cent. into the front-line priorities—health, education, fighting crime, and transport. When the Conservatives left office, the debt to GDP ratio was 44 per cent. On the plans that we set out this week, we will get it down to a third of GDP—33 per cent. That shows a Government running the economy properly, with sound and strong public finances.
    Mr. Peter Lilley: Can the Minister confirm that in 1979 the share of national income taken by spending and tax in this country was slightly higher than in the rest of the European Union, and that by 1997 it was substantially lower than the rest of the EU, giving the UK an enormous relative advantage? Can the right hon. Gentleman confirm that, on his own projections, that gap between us and our competitors on the continent is set to narrow, eliminating at least part of the great advantage that we built up over 18 years?
    Mr. Smith: That was rather a long way of explaining that the figure rose under the Tories.

    Employment (Scotland)
    Mr. Tom Clarke: If he will make a statement on the impact of his Department's policies on the levels of employment and unemployment in Scotland. [130135]
    The Chancellor of the Exchequer (Mr. Gordon Brown): Since the election, employment has risen by 62,000 in Scotland and unemployment has fallen by 22,000. Unemployment is now the lowest for 20 years. By 2003–04, public spending will be £3.4 billion higher than in 2000–01, showing that the Scottish economy and Scottish public services will do well.
    Mr. Clarke: Is my right hon. Friend aware that under this Government the number of unemployment claimants in Scotland has fallen by a quarter, and in my constituency by almost 30 per cent? Does he agree that, in the interests of even more progress, he is absolutely right to stand unflinchingly in support of the new deal and the Government's other employment initiatives, particularly in the light of some of the Mad Hatter ideas being spread around the House, including the implementation of public services cuts guarantees?
    Mr. Brown: I am grateful to my right hon. Friend, who is absolutely right. The new deal is a vital part of employment creation in this country. It is a tragedy that the Opposition will not support it, and that they would abolish it if they were elected. It would be one of their public spending cuts, which would total £16 billion. The Conservative party helpfully provided a regional breakdown for us. As my right hon. Friend knows, the cuts would be £1.4 billion in Scotland. Such cuts under a Conservative Administration would be a disaster. That is why there are no Conservative Members of Parliament from Scotland.
    Miss Anne McIntosh: Does the Chancellor agree that the new deal has been an expensive
    532
    failure in Scotland? The Conservative way forward of "Britain works" will be a much more successful system. Will the Chancellor tell us whether he has assessed the impact of the Barnett formula on employment in Scotland? It should be subject to review, and, post-devolution, greatly reduced.
    Mr. Brown: The policy word the hon. Lady was seeking was "abolition" of the new deal. That is Conservative party policy. A former Conservative Chancellor of the Exchequer said that, for him, unemployment was a price worth paying. I fear that the Conservative party is now following that route. It is a bit much for the shadow Chancellor to say that he supports full employment while proposing to abolish the new deal. However, he has got to do that because he would have to make public spending cuts of £16 billion.
    On Scotland, I am sure that the hon. Lady would agree that it is unfair that all the regions of this country and all the nations of Britain would have to suffer major public spending cuts as a result of a Tory programme. That is why the people will not vote for it.
    Mr. Alasdair Morgan: The past three sets of unemployment figures for Scotland, according to the International Labour Organisation—the Government's preferred measure when they were in opposition—have shown successive increases. The figure is now the same as it was two years ago. How does the Chancellor explain that?
    Mr. Brown: Since the 1997 election, the ILO figures show that unemployment has fallen by 22,000.
    Mr. Morgan: For the past three years?
    Mr. Brown: For the past three years, the figures have been minus 22,000. Youth unemployment has fallen by 71 per cent.—I believed that the hon. Gentleman would welcome that—and long-term unemployment has fallen by 54 per cent. If we had followed the policies of the Scottish National party, we would not be able to afford a new deal. The SNP has no cause for complaint; it should applaud our measures to create new jobs in Scotland.

    VAT (Listed Buildings)
    Mr. Lindsay Hoyle: If he will make a statement on the charging of VAT on the renovation of listed buildings. [130138]
    The Paymaster General (Dawn Primarolo): The repair and renovation of listed buildings has been charged at the standard rate since the beginning of the tax.
    Mr. Hoyle: I understand what my hon. Friend says. However, she may not be aware of the plight of the Rev. David Morgan and the parish church of Adlington in Chorley. He has genuine problems with church repairs. The church is a grade 2 listed building; what began as a simple exercise has incurred a cost of £145,000, and the VAT is more than £25,000. What help and consideration can be given to reducing VAT on listed buildings in future?
    Dawn Primarolo: I understand that in the grants from English Heritage to grade 1 and grade 2 listed buildings,

    533
    payments are made for urgent repairs, which my hon. Friend described. The conditions of VAT were established when the tax was introduced. We are not permitted to introduce reduced or zero rates. The Government therefore seek, through English Heritage and the Department for Culture, Media and Sport, to support our heritage through direct help.
    Mr. Peter Brooke: As the campaign has existed for about 15 years—I acknowledge that, some time in the past, I had to give the same answer as the Paymaster General—will the hon. Lady find a way to communicate the EU position to those who write to us? It would then become clear that the campaign has some serious deficiencies.
    Dawn Primarolo: As the right hon. Gentleman knows, having given the same answers and having been a Minister when the legislation was operating, the Government cannot change it except in periods of review of the tax. We are not currently in such a period.
    I have repeatedly made it clear to Members in detail when and why the imposition was made, when the tax began and what happened in 1984. Since that date, we have been unable to introduce zero or reduced rates. Therefore, the Government approach investment in historic and cultural buildings through methods other than VAT. As the Minister responsible for the tax at that time, the right hon. Gentleman will know that that is the only way forward, regardless of how strong feelings and campaigns are.
    Mrs. Gwyneth Dunwoody: But my hon. Friend will realise that although Treasury Ministers' habit of giving the same answers as their predecessors is not unknown, it is not a proper response to a proper worry. As a member of a very imaginative Treasury team, will she look seriously at some other way of tackling the problem? Frankly, English Heritage is not the answer. Such buildings consistently require not only that work be done by expensive craftsmen, but large sums of money. Destroying important buildings in the United Kingdom on the basis of being unable to change our tax system is not a sufficiently good answer.
    Dawn Primarolo: The Government are always looking for innovative ways to use the tax system to encourage the type of behaviour that we would like to see in the UK. My hon. Friend will know that Lord Rogers' s urban taskforce report on regeneration of our communities made a series of important proposals that will be discussed as part of the consultation on the urban White Paper. Tax issues regarding brownfield and greenfield sites and other matters have been raised. We are looking at them seriously and will respond.

    Business Taxation
    Mr. John Butterfill: What recent representations he has received on his policy on business taxation. [130139]
    The Financial Secretary to the Treasury (Mr. Stephen Timms): We have received numerous representations from business, including the statement from the Institute of Directors that the Budget shows that the Government believe in the enterprise culture.
    Mr. Butterfill: Does the Chancellor recollect his statement of 19 December 1998 that he intended to reduce business taxation? How does the Minister reconcile that with the CBI estimate that business taxation has increased by £5 billion a year for each of the past three years?
    Mr. Timms: No, that is not right. We have set out our ambition to increase productivity faster than our main competitor states in order to close the productivity gap that opened up over a long period. We have set out a clear strategy for doing that, and the tax system has an important role to play in boosting productivity and improving competitiveness. Corporation tax rates are at their lowest ever and are the lowest in the industrialised world. On average, small companies have enjoyed a corporation tax cut of about 25 per cent.
    Mr. Barry Sheerman: Is my hon. Friend aware that those of us who spend time with businesses in this country, including those in my constituency in west Yorkshire, find that business people say that this is the best time to be in business in terms of business taxation and the general business environment? They have one caveat: they are still worried about the value of the pound against the euro.
    Mr. Timms: My hon. Friend is right. There are 1 million extra jobs in the economy since the election and 100,000 more small firms. We are creating a new culture of enterprise for all and our tax policies are a key element in that success.
    Mr. Owen Paterson: The president of the CBI has clearly stated that the Government have imposed £5 billion of taxes on business. Will the Minister please name three businesses that have been made more competitive by that policy?
    Mr. Timms: Small businesses have enjoyed an average corporation tax cut of 25 per cent. Let me tell the hon. Gentleman about another tax change that we have made: the new 10p starting rate for corporation tax has helped 270,000 small businesses—not three, but 270,000.

    Children's Tax Credit
    Ms Sally Keeble: What progress is being made with the introduction of the children's tax credit. [130140]
    The Paymaster General (Dawn Primarolo): The Inland Revenue has issued claim forms to PAYE taxpayers in families that, according to its records, may be eligible for the credit. We estimate that almost 2 million forms have already been sent back to the Inland Revenue. There has been a radio and press advertising campaign to encourage people to claim and return their forms in good time.
    Ms Keeble: I am grateful for that reply. May I congratulate the Department on its effective advertising and take-up work, which has been well received in my constituency? Will my hon. Friend confirm that this tax credit will be available to people with small businesses who are not on PAYE? Does she agree that many families want to know whether this and the other child support measures that the Government have introduced will be supported by the Conservative party, or whether they will all disappear into its £16 billion black hole?
    Dawn Primarolo: The self-employed will claim the credit on their tax returns in the normal way. As for support for the children's tax credit, we must add it to the list of items that the Opposition oppose, because they have rejected and voted against it at every opportunity. That means that nearly £8.50 a week would be denied to families who need it most.
    Mr. John Bercow: Is the Paymaster General proud that hundreds of thousands of married couples have been deprived and short-changed of support for a full 12 months before the belated introduction of the children's tax credit?
    Dawn Primarolo: What I am proud of is that this Government recognise that pressure on families is greatest when they have children. What I am proud of is that we are addressing the fact that 3 million children are living in poverty, which was inherited from the previous Government's policies. What I am proud of is that at the end of this Parliament, 1.2 million children will have been lifted out of poverty, and the children's tax credit, which the Opposition oppose, will have played its part in that.
    Mr. Malcolm Chisholm: Is it not the case that no additional costs are associated with marriage, but that many are associated with having children? Is it not therefore correct to target help on children via the children's tax credit, the working families tax credit, the record rise in child benefit and the other many initiatives that will reduce, and finally eliminate, child poverty?
    Dawn Primarolo: My hon. Friend is absolutely correct. Indeed, when the shadow Chancellor was at the Treasury, he said that the married couples allowance had the least on-going justification because it was given to couples when they married—and only when they married—in recognition of the fact that the man was acquiring a wife and therefore had less taxable capacity. We recognise that pressure is placed on families when they have children—when one parent may give up work or when the family faces child care costs. That is the point at which to help families and to ensure that children are lifted out of poverty.

    Objective 1 Regions
    Mr. Andrew George: What progress he has made in completing financial arrangements for the United Kingdom's European objective 1 regions. [130141]
    The Chief Secretary to the Treasury (Mr. Andrew Smith): The spending review announcements ensure that all the UK's objective 1 programmes can now draw down
    536
    their full structural funds allocations for the next three years. This is very good news for the regeneration of objective 1 areas.
    Mr. George: I am sure that the Minister is aware how warmly the Chancellor's announcement on Tuesday was greeted in the UK's four objective 1 regions. However, is he aware how anxious those regions are to secure some further detail, such as the mechanisms that will now be put in place to ensure the efficient delivery of those match funds? What Treasury spending guidelines will be available to the spending Departments in objective 1 regions?
    Mr. Smith: I can give the hon. Gentleman some more detail now. The Government will provide full funding for expenditure under objectives 1, 2 and 3 programmes within departmental allocations. That is estimated to total £4.2 billion for EU structural funds in the UK over three years, including an estimated £600 million for new objective 1 programmes in English regions, and of course the extra allocation of £80 million, £90 million and £100 million to Wales to ensure funding of European expenditure under objective 1 there.
    We have delivered on our support for the objective 1 programme, regenerating areas of the country that were neglected by the Conservative party. The Liberal Democrats, like everybody else, should welcome it.
    Mr. Harry Barnes: Will my right hon. Friend look at areas that fall just outside objective 1 funding provisions and whose objective 2 funding has been seriously cut? I appreciate that borders must be drawn somewhere, but it is difficult for impoverished neighbours such as north-east Derbyshire, which cannot cash in on some of the provisions that have been added.
    Mr. Smith: I understand the concerns to which my hon. Friend draws the House's attention. I recently met representatives of the Alliance for Regional Aid, and we discussed precisely these issues. I have asked for a further report from my officials. I should be only too happy to meet my hon. Friend and his local representatives to see how we can ensure that if people are eligible for this support, they actually get it.
    Dr. Julian Lewis: Does the Chief Secretary recognise that there is only one objective for the Government on European funding or on anything else, which is to try to con the electorate in 2001 as they conned them in 1997? Is not the reason why they are so desperate to spend their time attacking Opposition policies instead of answering questions about Government policy the fact that they know there are no answers to those questions and that they are preparing to swap Front Benches with the Opposition at the next general election?
    Mr. Smith: The one crucial reality that is most relevant to all these issues is that a growing, extreme section of the Conservative party would end this help from the European Union and the support of these programmes because it wants to pull us out of Europe.

Business of the House
12.30 pm
Sir George Young: May I ask the Leader of the House to give us the business for next week?
The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): MONDAY 24 JULY—Consideration of Lords Amendments to the Child Support, Pensions and Social Security Bill.
Consideration of Lords Amendments to the Government Resources and Accounts Bill.
TUESDAY 25 JULY—Remaining stages of the Criminal Justice (Mode of Trial) (No.2) Bill.
Consideration of Lords Amendments to the Learning and Skills Bill [Lords].
WEDNESDAY 26 JULY—Remaining stages of the Census (Amendment) Bill [Lords].
Consideration of Lords Amendments to the Regulation of Investigatory Powers Bill.
THURSDAY 27 JULY—Consideration of Lords Amendments to the Utilities Bill.
Consideration of Lords Amendments to the Postal Services Bill.
FRIDAY 28 JULY—Motion on the Summer Recess Adjournment.
The House may also be asked to consider any Lords messages which may be received.
The House will also wish to know that on Monday 24 July there will be a debate on a general framework for equal treatment in employment and occupation, in European Standing Committee C. Details of the relevant documents will be given in the Official Report.
[Monday 24 July 2000:
European Standing Committee C—Relevant European Union Document: 13540/99; A general framework for equal treatment in employment and occupation. Relevant European Scrutiny Committee Reports: HC 23-vii; HC23-xix and HC 23-xxiv (1999–2000)
Sir George Young: The House is grateful to the Leader of the House for the business for next week. Can she confirm that on Monday, the Prime Minister will make a statement to the House on his return from the G8 summit? What other statements will be made by Ministers next week? On that subject, is it not slightly absurd that the House was formally told only at 11 o'clock today that there would be a statement on transport by the Deputy Prime Minister, whereas the media have known for days that that would happen? Is not there a better way of letting the House know about planned statements? I think that the right hon. Lady will find that the Chancellor mentioned the publication.
The Deputy Prime Minister's statement is, of course, not yet available to the House, but is it not clear that the details have already been released to the press? The Evening Standard must have had all the details before 9 o'clock, because they are set out in that newspaper. Will the right hon. Lady conduct a leak inquiry into how that discourtesy to the House could have occurred?
538
I understand that a decision is imminent on the future ownership of the dome. There is much public interest in how much it is being sold for and in the new owner's future plans for the site. Could the House have a statement on that?
Finally, can the right hon. Lady confirm that on Wednesday, there will be valedictory tributes to Madam Speaker and that on Thursday. there will be a business statement giving the business for the first two weeks back after the recess?
Mrs. Beckett: Yes, I anticipate that the Prime Minister will make a statement on the G8 summit.
I take the right hon. Gentleman's point about formal notification of statements, but he will know that those are the procedures of the House. Whether a statement is to be made is always in the balance until the morning in question because, apart from anything else, Madam Speaker and others may have decisions to make about the progress of business, so the final decision is not made until that morning. However, I take his point that there may be merit in giving advance notification if it is fairly certain that a statement is to be made. I endeavour to do that in the business statement, but I shall consider his point.
I fear that I have not seen the Evening Standard, so in consequence I do not know whether what is in it is accurate or a leak. Whatever the case may be, as my right hon. Friend the Deputy Prime Minister will be making a statement in the not too distant future, the opportunity to raise that issue will arise. Nor is it clear how imminent is the decision about the dome, but I shall draw the right hon. Gentleman's remarks to the attention of my right hon. Friend the Secretary of State for Culture, Media and Sport.
The right hon. Gentleman is quite correct to say that on Wednesday, we expect the formal valedictory from and for Madam Speaker. The whole House is looking forward to that. I have forgotten what the right hon. Gentleman asked me about Thursday.
Sir George Young: Will there be a business statement?
Mrs. Beckett: Yes. I anticipate making a business statement on Thursday.
Mr. David Taylor: Seven days ago I raised with my right hon. Friend the Leader of the House the subject of the cluster of new variant CJD victims in the north Leicestershire village of Queniborough, in the constituency of the right hon. Member for Charnwood (Mr. Dorrell). Will my right hon. Friend urge the Secretary of State for Health to make a statement before the recess on the background to that incident; to reassure the House and the people of Leicestershire that enough is being done to investigate this worrying occurrence; and to reassure them that sufficient resources are being devoted to it so that we can learn from what has happened?
Mrs. Beckett: I am grateful to my hon. Friend, who raised this matter last week. I shall certainly draw his remarks to the attention of my right hon. Friend the Secretary of State for Health. My hon. Friend will know that some quite detailed investigations and research are

539
under way. While I understand his anxiety to have a statement before the recess, if possible, I am sure that neither he nor anyone else would wish my right hon. Friend to make a statement before there is a clear understanding of the situation.
Mr. Andrew Stunell: May I draw the attention of the Leader of the House to the contrast between the way in which the House conducts its business in relation to the comprehensive spending review and its treatment of the Budget? The Budget covers one year and is followed by a three or four-day debate concentrating on various elements within it. The comprehensive spending review, which covers three years, is followed by a half-day Adjournment debate and some statements and questions. Bearing in mind the greatly increased significance of the CSR in the Government's planning and organisation, will the right hon. Lady consider whether in future its exposure to debate in the House might be more equivalent to that of the Budget? That might also give the House an opportunity to consider one or two elements that were not in the CSR, such as the omission of any improvement to pensions, which is certainly deeply felt by people in the country and right hon. and hon. Members on both sides of the House.
Will the Leader of the House look carefully at the business for tomorrow as there is a list of 58 private Members' Bills for consideration? Will she bear in mind the request that has been made through the Modernisation Committee and elsewhere for the House's procedures on private Members' business to be given careful scrutiny? Perhaps she will undertake that the Modernisation Committee and others will give that serious consideration in the coming weeks.
Mrs. Beckett: Of course I take the hon. Gentleman's point about the way in which the Budget is followed by several days' debate whereas the CSR does not follow the same pattern. However, the big difference between the two is that the Budget deals with the revenue-raising side of policy and looks in depth at what that means over a number of days. The comprehensive spending review, particularly one that looks three years ahead, is only a broad outline. Whereas the Budget is followed by the Finance Bill, which looks in detail at tax measures, the CSR is followed not only by a number of departmental statements, but by the unfolding of what those general totals mean over time.
I recognise that some silly statements have been made, particularly in the news media, about the CSR being a reannouncement and not involving new money. That is why it must be made clear to people what it means in terms of the impact on their local community—something that some people have an interest in obscuring.
With regard to the issues that the hon. Gentleman raised about pensions, of course I understand the great interest on both sides of the House in what is happening in terms of pension policy. My right hon. Friend the Chancellor said that there would be further announcements in due course, but I gently remind the hon. Gentleman that the Government are doing at least as much as the Liberal Democrats promised in their last manifesto when they said that they would increase pensions only in line with inflation. As far as I am aware, no one in the House—certainly not in the three main parties—proposes to increase pensions by more than inflation, or at least
540
to link them with earnings. Every party would have given the same increase because of this year's low inflation—something that, again, people are perhaps more anxious than they should be to obscure.
I take the hon. Gentleman's point about private Members' Bills. No doubt it will be raised again. I simply say that, under successive Governments, over many a decade, people have examined our procedures for such Bills, but have not thought fit to make major changes.
Ms Julie Morgan: Will my right hon. Friend find time for a debate on women's representation in Parliament? She will know that all political parties have difficulties in finding candidates who represent the whole of their communities—women and men. She will also know that Labour has been the most successful party in promoting women candidates. However, I am sure that she knows, too, that in Wales, the six seats held by Labour where the sitting Members are retiring have all chosen Labour candidates who are men. Can she find time for a debate in which we could discuss and find a solution to this very important issue?
Mr. Desmond Swayne: What about some more hermaphrodites?
Mrs. Beckett: My hon. Friend may have heard, as I did, some of the heckling from Conservative Members, who are of course embarrassed by the lack of representation of women in their ranks. Somebody—fortunately anonymous, as far as I am concerned—said that we needed more hermaphrodites. I remind the whole House, and Conservative Members in particular, that women are more than 50 per cent. of the population. They might bear that in mind when they make some of their less polite remarks.
I fear that I cannot undertake to find time for such a debate on the Floor of the House, but my hon. Friend might look to the opportunities in Westminster Hall, which offers double the time for Adjournment debates.
Mr. Ian Taylor: Will the Leader of the House ask the Home Secretary to make a statement next week on the implications for policing of the investigation that led to the discovery of the body of Sarah Payne? Her family are constituents of mine, and I think that their resilience under what was ultimately a tragic event was remarkable.
Will the Leader of the House also ask the Secretary of State for Health to come to the Dispatch Box and perhaps lead a debate on the future of cottage hospitals? Three cottage hospitals in my constituency—Emberbrook, Cobham and Walton—are suffering from cuts that could lead to the ending of the use of intermediate beds, much to the disturbance of local people.
Mrs. Beckett: I know that the whole House will want me to express our sympathy for the family of Sarah Payne and our horror at her tragic death. I know that my right hon. Friend the Home Secretary is conscious of the implications for policing, although we all know that there will always be tragic cases that, no matter how efficient our policing, will fall through the net. The hon. Gentleman may have noticed that we have questions to the Home Secretary on Monday, and he might find an opportunity to raise the matter then.

541
The issue of cottage hospitals is, as the hon. Gentleman appreciates, a matter for my right hon. Friend the Secretary of State for Health. I am well aware of his, and everyone's, wish to see the best and most efficient provision in health care, and I will draw the hon. Gentleman's remarks to his attention.
Caroline Flint: What plans does my right hon. Friend have for a hectic week ahead in terms of the timetabling of business and the programming of motions to ensure that we have a speedy and effective week of legislating?
Mrs. Beckett: My hon. Friend is right to draw attention to the fact that it is important that the House should deal with its business expeditiously and well. She is also right to identify the fact that proper programming of discussion is the most effective way of achieving that. The Government hope that it will be possible to achieve business and get a proper pattern of debating by agreement, but we of course reserve the right to table any motions that might be required to ensure that business is indeed secured.
Mr. Michael Jack: It is evident from her statement that the Leader of the House has not been able to find time next week for the promised debate on defence procurement. Hundreds of aerospace workers lobbied Parliament this week, anxious about their future. What reassurance can she give me that, when the House returns, we will have an early opportunity to hold that debate?
Mrs. Beckett: The right hon. Gentleman may or may not have heard me say last week that the Government have every intention of scheduling a debate on defence procurement. He will know that, in recent days, the Secretary of State for Defence has made a number of procurement announcements, all of which were welcomed. He will know also that the review announcement on Tuesday conveyed that more resources would be available for defence. In other ways, the Government have made resources available to the aerospace industry. All I can say to the right hon. Gentleman's constituents is that the Government are endeavouring to make the right decisions for our defence needs—decisions that have a proper regard for the national interest and a continued rise in employment.
Mr. Paul Flynn: When will we have a chance to debate early-day motion 985, on a matter that my right hon. Friend possibly has not had a chance to study?
[That this House welcomes the statement of the Government Actuary that the link between the basic pensions and the earnings level could be restored for the next five years without any increase in National Insurance contributions; notes the answers to parliamentary questions that confirm that keeping contributions at their present level, as a proportion of earnings, would allow the link to be paid until 2011 while producing a surplus of £4 billion; and believes that this evidence fully justifies an immediate restoration of the link and a declaration of the Government's intent to increase pension levels at the true rate of earnings inflation.]
542
There seems to have been a significant change in Government policy late last night in another place, where the Government accepted, for the first time, a welcome amendment by Baroness Castle of Blackburn which instructed the Government Actuary to investigate the results of restoring the link between earnings and the pension level. The Government Actuary has indicated to the Select Committee on Social Security that the link could be restored without any additional spending and without any increase to the national insurance scheme for the next five years. Other parliamentary answers have indicated that the link can be restored up to the year 2011. This long-awaited act of justice for pensioners should be carried out within the foreseeable future. It is now, as we know, affordable and can be done without any additional public cost.
Mrs. Beckett: My hon. Friend and I are probably among the few in this House who have ever read the reports of the Government Actuary with interest. I recognise the basic point that he is making and the Actuary will no doubt flesh out the information that is needed. My hon. Friend will know that any such decision would have a major impact on other potential changes in social security. He will know also that, during the course of the Parliament, the Government will have spent £2 billion more on support for pensioners than would have been required by restoring the link with earnings. We have done so by concentrating the greatest amount of help on those who were already in the greatest need. The Government recognise other areas of need and are moving to deal with them appropriately.
Mr. David Curry: Will the Leader of the House bear it in mind that the Ministry of Agriculture, Fisheries and Food intends next week to announce a major reorganisation of its regional service centres, which will include the closure of some centres? Will she bear it in mind also that the Select Committee on Agriculture intends to vote on a report on this very matter next Wednesday? In light of the debate on the relative powers of the Executive and the legislature, will she ask MAFF to bear in mind the appropriateness of the two announcements?
Mrs. Beckett: I will do so, but I remind the right hon. Gentleman that it is Agriculture questions next Thursday when he may have an opportunity to make those points himself.
Shona McIsaac: Following the advice of Advocate-General Siegbert Alber that European member states should impose VAT on tolls, I have established that the final decision is expected on 12 September. As this is during the recess, I urge my right hon. Friend that nothing should be done on this serious issue until we have come back from the recess and had a chance to debate it, so that those of us with interests—including bridges, such as the Humber bridge—can press our case that we should exempt this country from that levying of VAT.
Mrs. Beckett: I understand the strength of feeling of my hon. Friend on the matter and she will know that the measure would have a more major impact on many other member states than it would on the UK. I cannot undertake to find time for a debate on the matter in the

543
near future, but she may find later today, and on other occasions, the opportunity to raise the issue. In case she does not, I promise to draw it to the attention of my right hon. Friend the Secretary of State for the Environment, Transport and the Regions.
Mr. Peter Brooke: Yesterday, while responding to my right hon. Friend the Leader of the Opposition in columns 365–69 of the Official Report, the Prime Minister made six references to Opposition spending cuts of £16 billion. Thereafter, in columns 371–74—while responding to lesser mortals—the Prime Minister changed gear upwards to Opposition spending cuts of £24 billion at the next election. Can we have a definitive statement next week on the second figure, so that some of us who are interested parties can from it work out the date of the next election?
Mrs. Beckett: I have not seen the text of Hansard to which the right hon. Gentleman refers, but it is occasionally true, as I know to my cost, that Hansard very, very rarely does make errors. [Interruption.] I have vivid memories of having referred to someone as a "mugger" and seeing it represented in Hansard as "mother". It did rather spoil the sense. However, I heard clearly what the Prime Minister said. What he said was, £24 million per constituency. In other words, it was a breakdown of the £16 billion to show the impact in the constituencies of individual Opposition Members. I sympathise with the right hon. Gentleman's anxiety on that point and feel confident that it is something that the Conservative party will hear much of between now and the election.
Mr. Eric Forth: May we please have an urgent debate on leaks—not the Welsh kind, but the Gould kind—because the nation is now surely entitled to know just where all these leaks are coming from? Is it from Downing street, from Millbank, or, as I have seen in one newspaper, from the Daily Express? The reason why it is important to know is that, in this age of alleged freedom of information and alleged open government, it would appear that the Government are nevertheless concerned to cover up ever more of what goes on at the highest level, rather than be open, transparent and honest with the people. Can we please have an urgent debate on that matter, so that we can eliminate all the suggestion of leaks and enter a period of genuine open government?
Mrs. Beckett: It is entirely clear in whose interest these leaks are being printed at the time that they are being printed. It is to try to ensure that the British people do not hear the news about the substance of the Government's policies. What is becoming increasingly clear is which party is really interested in substance and which in spin.
Ann Clwyd: May we have an early debate on the Ilisu dam in Turkey, from which the right hon. Member for Fareham (Sir P. Lloyd) and I have just returned, on a visit funded by Kurdish human rights groups? The project involves shoving 45,000 people out of their homes without proper consultation. It infringes most of the World Bank guidelines. It is bad for the environment; it is bad for human rights. It would be very bad if the British taxpayer, through export credit
544
guarantees, were to get involved in that project, particularly as the Turkish Government are not likely to adhere to the conditions set down by the Department of Trade and Industry.
Mrs. Beckett: I of course understand the concern that my hon. Friend and others, including the Select Committee on Trade and Industry, have expressed. She will know that the Government have indicated that we would take the most careful note of the concerns expressed, but she will also know that, as yet, no decision has been made or announced.
Mr. Stephen Day: The right hon. Lady will be aware that the Government have a problem with losing important pieces of paper, but it has become more serious lately, according to reports in The Guardian: the Government have lost 5 million pieces of confidential information—the tax records of 5 million people. That was brought to light by The Guardian from, apparently, a copy of an internal departmental memo.
As Ministers have known about that grave error and concern for so long, why have they not come to the House to explain the matter to Members—who will have to deal with the problems of our constituents, many of whom will be affected—and, indeed, to the 5 million people who will be seriously affected? When the right hon. Lady has explained why Ministers have not come to the House already, can she explain when they will come to the House to explain?
Mrs. Beckett: I am not entirely sure, but it strikes me as possible that, if some records are not at present identifiable, no one can let the people who are involved know because no one knows who they are. That seems to follow rather logically from the loss of those records. However, what is truly remarkable is that, given how many tax records it is said the Inland Revenue has at least temporarily mislaid, it was able to find Lord Levy's records when it needed them.
Mr. Michael Fabricant: Does the right hon. Lady agree that there are many unsung heroes in the United Kingdom? Can she find time for a debate on the honours system, so that the brave soul who is exposed to fear, loathing, ego, cant and sheer hypocrisy at the heart of 10 Downing street can be justly rewarded?
Mrs. Beckett: I should certainly like to see that person justly rewarded.
Mr. Tony McWalter: In the context of next week's debate on resource accounting, can my right hon. Friend bear it in mind that there are some new towns, which include Hemel Hempstead, whose resource base is almost entirely derived from land devoted to housing stock in the past? As a result, they have a very low resource base which is not funded initially from housing. In the context of changes about ring-fencing housing resources, those new towns are now faced with potentially catastrophic cuts. There is an impending 41 per cent. cut in the resource base in Dacorum in my

545
area. Will my right hon. Friend draw that to the attention of the Treasury so that, with a bit of luck, true resource accounting will not be invidious for the new towns?
Mrs. Beckett: I certainly undertake to draw my hon. Friend's remarks to the attention of my right hon. Friends in the Treasury team. He may find some opportunity to flag up the issue during debates on the matter next week.
Mr. John Bercow: Can we please have an early debate in Government time on the important doctrine of collective responsibility, the Government's current interpretation of which seems to be neither collective nor responsible? Given that the Chancellor of the Exchequer wants the Prime Minister's job, the Foreign Secretary wants the Chancellor's job and the Northern Ireland Secretary wants all their jobs, would it not be helpful to have an early debate in which all those Ministers were present so that we could see them on the Treasury Bench united in fraternal detestation of each other's guts?
Mrs. Beckett: I do not think that the House will wish to spend time on such a debate. If the hon. Gentleman's definition of fraternal support is the way in which the shadow Chancellor's policy has totally scuppered the career of the Leader of the Opposition, all I can say is that they are welcome to it.
Mr. Andrew Robathan: Will the Leader of the House persuade the Prime Minister to make a statement next week on his ministerial code? In particular, could he explain to the House and the country why it has disappeared off the web? It used to be found on the Cabinet Office website, but it has now been reorganised out. One can hunt around the web for as long as one likes. One can turn to something which is misleadingly called the opengov.com site, but the statement is not there—nor is there very much else there. Could the Leader of the House arrange for the code to be put back on the web, perhaps on the Deputy Prime Minister's own website, at least for paragraph 113?
Mrs. Beckett: I am not aware of the ministerial code's destination at this time, but I shall certainly draw the hon. Gentleman's remarks to the attention of the relevant authorities. If I were the hon. Gentleman, I would not worry too much about its applying to him for a while yet.
Mr. Tim Loughton: Given the comment by Lord Rogers in The Independent today that the Chancellor has singularly failed to stop the haemorrhaging of people from our rundown inner cities and his continued frustration that not a single recommendation of his urban taskforce report has yet been put into effect, will the Leader of the House promise the House an urgent debate after the recess so that the Government can account for what they are actually doing to tackle deprivation in our inner cities, rather than just appointing talking shops to talk about what should be done?
Mrs. Beckett: As I recall there will be Question Time to the relevant Department in the near future. The hon.
546
Gentleman should know that it is not the case that nothing has been done to carry out the recommendations in Lord Rogers's report. A great deal of work has been done in that direction. The hon. Gentleman should also know that our inner cities got into their present state under the Government whom he supported.
Dr. Ashok Kumar: Will my right hon. Friend find time to discuss the future of the steel industry? As she is no doubt aware, 1,200 redundancies have just been announced in Teesside and South Yorkshire, and 1,400 were announced only a few weeks ago. Will she ask the Secretary of State for Trade and Industry to come to the House for a debate on the future of the steel industry?
Mrs. Beckett: I know of my hon. Friend's great concern for the steel industry and for employment in that industry. He will be aware that my right hon. Friend the Secretary of State has taken a great interest in these matters and does what can be done to assist and support that industry. We remain in discussions with the steel industry. I fear that I cannot undertake to find time for a further debate on the matter on the Floor of the House in the near future, but my hon. Friend might seek a debate in Westminster Hall.
Mr. Nigel Evans: I declare an interest in the question that I am about to ask, as I am an owner of a convenience store in Swansea. Will the Leader of the House arrange for somebody from the Department of Trade and Industry to come to the House within the next few days to make a statement on the sale of loose goods in shops and supermarkets? She may be aware that Tesco announced on Monday that it was going to reverse its decision, and would sell loose goods using imperial weights and promoting pounds and ounces.
Some 38,000 small stores in this country are still using imperial weights. Officials in local authorities up and down the country will be confused about what they should be telling those stores. A number of the stores will be operating on the margins of profitability, and they simply cannot afford to buy new scales to replace existing usable scales. Will the right hon. Lady clear up the confusion and arrange for a statement to be made in the House in the next few days?
Mrs. Beckett: Of course I understand and sympathise with the concerns of small traders, who may be confused. However, it is a little surprising that neither the hon. Gentleman nor his right hon. and hon. Friends have been able to clear up this confusion, as it is as long ago as 1989 that the then Government agreed that these measures should be phased out by 1995, and they then imposed a delay until 2000. So people should have been aware of this matter for at least 10 years.
I understand—and I know that the House will wish to have this information—that it was as long ago as 1862 that a Select Committee of the House recommended that Britain should go metric, so we have had some time to adjust. Although, as I say, I fully understand and sympathise with the difficulties of small traders, I do not think that "confusion" is the right way to describe what they are experiencing. We should be trying to get people to accept the variation of usage, with one set of measures

547
alongside the other, but we must recognise that among young people in particular, the use of imperial measures is disappearing.
Mr. David Tredinnick: When the House returns in October, will the Leader of the House find time for a debate on one aspect of parliamentary reform that has not had enough attention? I refer not to the hours in the day that we sit, but the days of the year on which we sit. Is it not a fact that the parliamentary calendar is completely out of balance, with far too much business being taken between January and July? Would it not be much better if the recess was from June to September? What advice does the Leader of the House have for Members who are parents, whose children will be on half-term the week that we return?
Mrs. Beckett: I am very conscious of the difficulties faced by parents. There is, and long has been, a discussion about whether we can establish a firmer parliamentary calender and whether there should be a slightly different balance to the parliamentary calendar. There is only one set of circumstances under which a firmer parliamentary calendar would be possible—that is, if we were able to make firmer arrangements for the programming of our debates. I look forward to the hon. Gentleman being in the same Lobby as me when we debate the Modernisation Committee report.
Dr. Julian Lewis: Will the right hon. Lady seek to persuade the Minister for the Cabinet Office to make a statement about the extent to which publicly funded special advisers at No. 10 Downing street are being used to wage faction fights among the leading personalities of the Labour Government? I have in mind not only the infamous "TB" memorandum, of which so much has been heard, but the remarks reported last weekend, when No. 10 had a senior special adviser quoted as saying of the Chancellor of the Exchequer:
He is poisoning relations with half the Cabinet and the sooner he goes the better.
548
Although I have every sympathy with people holding that opinion, that is a matter for their internal faction fighting. It should not be something that I and other taxpayers are funding.
Mrs. Beckett: I remind the House that it has long been the case that those who are political rather than civil service appointees have worked with Governments of every political shade—very useful it is too. Indeed, a large number of them now occupy the Opposition Benches. Furthermore, we trebled the resources available to the parliamentary Opposition to enable them to be better staffed—something that the Conservative Government denied us when we were in opposition.
It has been truly remarkable that, during business questions today, Opposition Members, with a couple of honourable exceptions, have not wanted to talk about the extra money going to hospitals, schools or the police—any of the matters in which the British public are really interested. That is what people will notice.
Mr. Swayne: It might have escaped the right hon. Lady's notice that we shall have opportunities to question Ministers on those matters—not least after business questions today.
Is there any substance to the press reports that Labour Back Benchers who are not expected to hold their seats are receiving counselling to help them to adjust psychologically? Will the right hon. Lady make a statement to the House setting out the counselling services that she will make available to Back Benchers who, notwithstanding the fact that they will continue to hold their seats, will have no further role in holding the Government to account as a consequence of the plans to programme all legislation?
Mrs. Beckett: I know that the hon. Gentleman is an assiduous attender in this place. I am sorry that, despite the fact that we have offered to conduct seminars on how to be a good Opposition, so many Opposition Members seem not to have been able to take them on board.
Dr. Julian Lewis: You had enough practice.
Mrs. Beckett: I assure the hon. Gentleman that, given the way the Opposition are going, they will have plenty of practice too.

Transport (Ten-Year Plan)
1.6 pm
The Secretary of State for the Environment, Transport and the Regions (Mr. John Prescott): Transport is a subject that has been close to my heart for all my working life in and out of Parliament. However, for decades it has been in decline—dogged by stop-go funding and a short-term approach.
On Tuesday, the Chancellor set out how we can now begin to invest properly in our public services. He was able to do that because we have dealt with debt and sorted out the public finances. That meant that we had to stick to the depressed Tory spending figures that we inherited. We continued the previous Government's fuel duty escalator, both to limit greenhouse gas emissions and to restore public finances. That was not easy. It was not popular, believe me; but it was the right thing to do. Now, we can build and invest for the future.
Decades of under-investment and the lack of strategic planning left us with a transport system in crisis. That is already changing. In three years, we have made real improvements—[Interruption.] If hon. Members will listen, they will be able to make a judgment. These are the facts: we have begun to tackle the road maintenance backlog; the overall decline in bus passengers has been halted, and in many areas passenger numbers are rising for the first time; the number of rail passengers has increased by 17 per cent. and rail freight by 22 per cent. since the general election. That is what has happened during the past three years.
Transport is now a growth industry, and many of the problems that it faces are of expansion—not of decline. We have laid the foundations for the long term. We needed to integrate the Departments of Environment and Transport—we have done that. We needed to set out a new strategy—we have done that. We needed to bring in radical new legislation—we have done that. We needed to introduce new forms of finance; we have done that. Today, I am announcing new resources to bring about a step change in transport.
These are new ideas, new powers and new resources—a new approach for a new century. It is on these foundations that we are building today's 10-year programme. It is based on long-term investment by Government and industry to modernise the country's transport system. That is vital for our economic success, and for the quality of our lives. It is excellent news for manufacturers and for the construction sector, which will be able to plan for the long term. Much of that sector had closed down because of the short-term approach to investment in industry.
On Tuesday, the Chancellor announced that, over the next three years, public spending on transport will rise from £5 billion to more than £9 billion. Real-terms capital investment will double. That has been widely welcomed. The Automobile Association said that it was
a welcome change from decades of penny-pinching and under-investment … There's no doubt that this represents the most serious attempt to tackle our transport crisis in years.
The Rail Users Committee said that the announcement was
good news for rail passengers and for the country.
550
The Confederation of British Industry also welcomed it. And the CBI director-general, Digby Jones, said on the "Today" programme this morning that what is needed is a 10-year programme providing substantial public and private investment—he stated, up to £180 billion. My Department's modelling, analysis and consultation came to a similar conclusion. Our analysis is published in a document available in the Library.
There is now a broad consensus about what is needed to reduce congestion and to provide a bigger, better and safer railway and a real choice in public transport. With public investment keeping pace with economic growth after the year 2004, total spending over the 10 years—public and private—will now be £180 billion. One hundred and thirty-two billion pounds of that—almost three quarters—will come from the public purse. This is not all new money, but even if we maintained this year's spending as the norm, that means over £50 billion of extra public expenditure. Capital investment by Government and industry together will be 75 per cent. more in real terms than over the last decade.
The plan addresses the issue in a realistic and businesslike way. There are no frills, no promises of a rosy, traffic-free future: just our best judgments—based on a detailed analysis—of what the new resources will deliver.
We are securing long-term investment through long-term partnership contracts: new rail franchises lasting up to 20 years, 30-year contracts for roads and 30-year contracts for the London underground. But let me make it absolutely clear. If we put in public money, we expect rail and bus companies—and local authorities—to deliver the goods: more investment and better services for the travelling public, on budget and on time.
The policy that we inherited on the railways planned for decline and reduced public support. Our programme includes £60 billion for a bigger, better and safer railway—the biggest investment in railways for generations.
We shall deliver better quality for the travelling public, lower regulated fares, 50 per cent. more passengers and 80 per cent. more rail freight, and a new Strategic Rail Authority with a new rail modernisation fund of £7 billion to help deliver these goals. So we shall deliver a railway system that is better for the passengers, better for freight, better for the economy and better for the environment—win, win, win and win again.
Our programme includes £59 billion for modernising local transport in every region throughout the country. It will increase bus use by 10 per cent., with guided buses, priority routes, park and ride and a modern fleet, building on the £400 million of private investment that has already taken place.
Light rail can transform our cities. Manchester and other cities have shown what a difference it can make. So we are going to provide resources for up to 25 new light rail projects in our major cities. We shall create greater social justice with more accessible buses, trains and taxis for disabled people, and cut-price fares for pensioners and disabled people, and for the first time we are recognising the problems of people who live in poorly served, deprived urban areas, cut off from jobs and services. They can look to help from a new urban bus challenge fund to provide new links to their communities.

551
Our successful rural transport fund, which has already secured over 2,000 extra services in rural areas, will now rise from £60 million to £95 million a year, with rural transport partnerships established in every county.
Both urban and rural communities will benefit from an extension to the fuel duty rebate for community transport.
Mr. Bernard Jenkin: That is our policy.
Mr. Prescott: The hon. Gentleman is in opposition—has he not heard?
Small-scale local improvements can make a big difference to people's lives, such as schemes to make walking and cycling safer and easier, and 20 mph zones, especially where children are most at risk. We shall increase funding for those schemes.
In London, our great capital city, we inherited a creaking transport system, congested roads and overcrowded trains—I do not think that anyone disputes that. We have already made major investments in the capital, with the Jubilee line, docklands light railway extension and other projects. Over the next 10 years, our programme provides £25 billion to support the London transport strategy, with better buses, less crowded trains and less congestion on the roads. This will be enough to produce a real step change in bus services, town-centre improvements and safer walking and cycling. The public-private partnership will secure investment in the existing underground. We have made provision for new links; an orbital London railway and longer-term projects such as the new east-west rail link and east Thames crossings. We are determined to use refranchising to get better and more reliable rail services for commuters.
Those major improvements in public transport throughout the country will help to reduce congestion and pollution. Sensible land-use planning and new technology can make a difference. However, we need also to make better use of our existing road network. We have already set up studies into our busiest transport corridors to find solutions that will involve all types of transport in the multi-modal studies. The first conclusions will emerge over the next few months, and we are providing the resources to implement the results.
The programme includes £21 billion for the strategic road network. This is enough to widen 360 miles of the most congested roads, such as the Al and the M6, and to invest in "electronic motorways" to manage traffic better and to keep drivers better informed. There will be 100 new bypasses to take traffic out of hard-pressed villages and towns, schemes to tackle congestion and safety hotspots and low-noise surfaces on 60 per cent. of the trunk road network, including all concrete roads.
We have already dealt with the backlog of trunk road repairs. We will enable local authorities to get rid of the backlog on local roads with a £30 billion maintenance programme, which is covered under the heading "Local Transport".
Without the measures set out in the plan, congestion is forecast to grow by 28 per cent. on inter-urban trunk roads and by 15 per cent. in larger urban areas. With the plan, we shall not only eliminate this forecast growth but reduce congestion below current levels by 2010. Our proposals will produce savings in greenhouse gas emissions, helping us to achieve our Kyoto targets and more. We will improve air quality, with new resources to encourage cleaner fuels and vehicles.
552
Safety is fundamental to the plan and important to the House. The terrible accidents at Ladbroke Grove and Southall, and more than 3,000 deaths on our roads every year, are a vivid reminder that we can never afford to be complacent. We will ensure the installation of train protection systems, as recommended by Sir David Davies. I have stressed repeatedly that we will not pre-empt Lord Cullen's inquiry. I give a categoric assurance that the plan will deliver any further measures arising from Lord Cullen's inquiry. Safety will always be first in my priorities.
Under various Governments, our roads are already among the safest in Europe. Over the next decade, we are determined to reduce the number of people killed or seriously injured in road accidents by 40 per cent., and by 50 per cent. for children. We are providing the resources to enable government, the Highways Agency and local authorities to play their part in achieving these targets.
It has often been the role of Labour Governments to modernise this country's infrastructure, and that is what we are doing again with our 10-year plan. There will be long-term investment and public-private partnership to increase choice and cut congestion. The Opposition have plans only to cut public spending. They have no plans to cut congestion. The public will ask them to declare where they would make cuts in our programme.
A Labour Government are working with business to deliver the long-term investment that is needed to rebuild our infrastructure, cut congestion, improve public transport and give people greater choice. I hope that people will understand that modernising the transport system will take time and create inconvenience and problems. Making the necessary changes, will at least mean that people will be aware that we are making long-term decisions and dealing with the cause and not the symptoms of a congested system.
New roads and railways are not built overnight. However, with sustained government investment and the backing of industry, we shall make year-on-year improvements to get the job done. The plan will get Britain moving and give the people of this country a transport system on which they can rely. The British people have waited decades for a long-term approach such as this. It is what they deserve, and I commend it to the House.
Madam Speaker: Before I call the hon. Member for North Essex (Mr. Jenkin), may I point out that I noticed some Members leaving the Chamber during the statement, no doubt to go to the Vote Office to obtain the document? I regard it as a discourtesy to any Secretary of State for Members to walk out to obtain a document while a statement is being made. If Members want to be called, they should remain in the Chamber throughout and listen to the statement. The statement, not the document, is being questioned at this stage.
Mr. Jenkin: I thank the Deputy Prime Minister for giving me an advance copy of the statement. I give a broad endorsement to the comments that he made about safety and, in particular, about the Cullen inquiry.
As for the rest of the statement, the Deputy Prime Minister must think that the British people were all born yesterday. The travelling public will not be fooled. Labour has made promises before and people are still waiting.

553
They are waiting in traffic jams, and they have done that; they are waiting for buses stuck in traffic, and they have done that; and they are waiting for overcrowded trains, and they have done that. They are fed up with the right hon. Gentleman's promises and they are fed up with being ripped off by the Government; they have done that.
After three wasted years, the Deputy Prime has the nerve to come to the House and say, "I've got a 10-year transport plan." How much tax will road users have to pay over that period? It is at least £423 billion. That is more than £18,000 per household. That will be his legacy. His only real policy is to try to tax hard-working people and hard-pressed pensioners off the road.
Petrol tax is a regressive tax. Under Labour, the poor pay the biggest increases. Where is the social justice in that? On top of the £423 billion in taxes, the congestion and parking taxes will hurt the poor most. Why are the Government simply reserving the roads for the rich and for Ministers in their Jaguars? Should cars be just for the privileged few?
What does the Deputy Prime Minister's big spending number really mean? How much is double counted or reannounced? How much relies on investment by the transport industries that we privatised? How much is just pious hope, empty promises and post-dated cheques?
As in every Government announcement, these figures are designed to mislead. How can we believe the Deputy Prime Minister's promise of 25 light rail schemes when he told the House of Commons that
light rail systems are an extremely expensive way of dealing with congestion … ?—[Official Report, 20 October 1998; Vol. 317. c. 1072.]
His former deputy, the right hon. Member for Hamilton, North and Bellshill (Dr. Reid), said in a press release that
we will not be in a position to support similar light rail schemes for the foreseeable future.
However desirable light rail systems may be, are these not just fantasyland promises from a Government desperate for votes? How many systems will actually be built within 10 years?
What about all the promises that the Deputy Prime Minister has made before? Does he remember the 1998 White Paper? In it, he said:
We want to cut congestion … and avoid the urban sprawl that has lengthened journeys and consumed precious countryside.
However, the Deputy Prime Minister is building more houses over the green fields of England. Britain now has the worst congestion in western Europe.
Labour Members all cheered two years ago when the M6 widening was cancelled, apparently to save the planet. Now they all cheer when it is going ahead. That is an admission that the Deputy Prime Minister was wrong. Will they all cheer again when it fails to materialise?
Does the Deputy Prime Minister recall saying that he would have failed if there were not far fewer journeys by car? This new 2010 target is an admission that he has already failed. Has he not read the dire warnings of his own congestion report, which showed that congestion will increase by 90 per cent? Why is his target on congestion any more relevant than all his other targets?
The Deputy Prime Minister has abandoned his other targets, such as that to treble rail freight or that to double cycling. What is the point of all the new rail investment
554
if people keep missing their train because they are stuck in traffic jams created by the right hon. Gentleman? How dare he claim credit for announcing 100 new bypasses today, when he scrapped so many bypasses just two years ago? Can he explain why he has announced 100 bypasses, although his own publication says that there will be 50 new bypasses? Is that just another bit of spin? Is not the Secretary of State who murdered the roads programme now trying to change his plea to manslaughter? How is he going to stop the Mayor of London cancelling schemes such as the A23 Coulsdon bypass?
Is it not perfectly clear that, after three wasted years, nobody believes a word that the Secretary of State says? After all the White Papers and consultations, glossy brochures and photo opportunities, today is about nothing more than the sliding credibility of the Government and the looming date of the next election. Does the Secretary of State think that the endless spinning of larger and larger telephone-number figures for his plan conveys anything other than the whiff of panic about the Government's lamentable transport policy?
The Deputy Prime Minister has often attacked the spinning and lying of spin doctors and has said:
We cannot win simply on image and presentation.
However, is he not resorting to that and that alone? In March, he told the House:
I regret and denounce the leaks … and I am doing all I can to prevent them.—[Official Report, 7 March 2000; Vol. 345, c. 863.]
Who, therefore, has been briefing the press on the 10-year plan, week after week, for the past six months? The so-called enemy of spin is the king of spin.
This is not real money, but a 10-year plan from a one-term Government who cannot see further than the headlines in tomorrow's newspapers. The plan is a broken policy on the back of broken promises from a broken-backed Secretary of State.
Mr. Prescott: I am pleased that the hon. Member for North Essex (Mr. Jenkin) thanked me for giving him the report, but it is a pity that he did not read it. If he had, he would not have asked half the stupid questions that he did.
There has been some speculation on the number of leaks to which he referred. I treat leaks seriously. [HON. MEMBERS: "Oh!"] The House can make a judgment on those matters. There has been a great deal of speculation, and different figures are given all the time. I have a document—which I shall not call a leaked memo, as it is a paper from the research department of the Conservative daily bulletin—which predicts that I would produce a £130 billion programme. I announced a £180 billion programme, but the research department had a chance to speculate, although it underestimated what I would do. Many other people made judgments about what the total amount would be, and I observed with interest all those different figures. I have brought my figures for the 10-year plan to the House at the proper time.
Mr. Jenkin: Fantasy.
Mr. Prescott: The hon. Gentleman thinks that that is fantasy. However, I did not notice him address himself to rejecting the idea that investment was needed. There was not one word from him to suggest that he rejected the fact that all that money was needed to modernise the transport system. If that sum is needed, on that considerable scale,

555
representing the greatest investment in rail seen in generations, it is because investment had presumably declined in the past 20 years. I am prepared to concede that no Government have ever found sufficient resources to put into our transport system and I feel that that is because Treasury rules rather limited that investment.
Our plan talks about public-private partnership, which is something that the previous Administration started to do, but we have taken it much further, by getting private contracts guaranteeing investments for a longer period than the one year or three years that one is likely to get from the Treasury. As a public-private partnership will provide that money, I would have thought that the Opposition could at least agree with that.
Mr. Jenkin: Fantasy.
Mr. Prescott: If the hon. Gentleman thinks that it is fantasy, I suggest that he talk to the director-general of the CBI, who is not necessarily known as one of our spokesmen and who announced today that the minimum amount needed for investment in our transport system was £180 billion. If the hon. Gentleman thinks that the CBI is fantasising, I must tell him that it arrived at that view after proper consultation and having listened to its members, who explained what the country needs to improve the economy and the environment to and reduce congestion, which all involve considerable cost. That is the CBI's judgment. Talk of fantasy is just Opposition rhetoric.
On delivery, in three years we have seen, for the first time, a reverse in the decline of our industries. We have reduced the backlog and seen growth in freight and passenger traffic, both on buses and on rail. That was not evident during the 18 years of Tory Administration. As for all the talk about glossy documents, I can say to the hon. Gentleman that I think that long-term solutions are necessary. I have been in the transport industry, and I am fed up with seeing Governments cut back on capital programmes, because those cuts eventually catch up with them. I have tried to introduce long-term planning.
If we want such planning. first we have to get the thinking right, so we issue a White Paper and then we debate it. Then we have to make sure that we have the powers to introduce the measures, and I have done that. This is the third step in three years to get substantial resources, which the Chancellor has been able to give us simply because we made difficult decisions in the first two years, so I am proud to bring this investment to the public—let them judge what is fantasy and what is reality. The election will surely give the hon. Gentleman his answer.
Mrs. Gwyneth Dunwoody: Is my right hon. Friend aware that this first attempt to have a structured transport plan will be warmly welcomed throughout the country not only by all passengers, but by people who use all forms of transport, whether by road, rail, sea or air?
Will my right hon. Friend clarify one or two points? Does his undertaking on the train protection system mean that, if Lord Cullen makes a different recommendation, my right hon. Friend expects to update the equipment in all existing trains? Is he telling us that there will be new lines as well as enhancement on the London underground system? Can he assure us that, in the new round of
556
franchising, the private companies involved in the transport system will not only give undertakings to enhance the bricks and mortar that they own, but make it clear that the passenger is their first commitment, and that, in future, we will have new trains and better services? We shall certainly examine carefully how much transport is financed by the fare box, to ensure that we achieve the right balance.
Above all, does my right hon. Friend accept that, because transport takes so long to bring into operation, it is essential that passengers immediately begin to see much better conditions? They want new systems; they have waited over 20 years and they want those systems to begin operating as soon as possible. This is the first serious attempt to provide that level of care.
Mr. Prescott: I am grateful to my hon. Friend for that welcome. She is right to point out the concern about safety systems on our railways. I have already promised, and announced to the House, that we will implement the recommendations of Sir David Davies that the warning systems should be applied on all lines and that automatic train protection should be introduced for high-speed lines. If Lord Cullen makes further recommendations about the timetable, I will want to consider those seriously and I would be inclined to say that we should adopt them, but the House will understand that I must wait and see what those recommendations are.
I want us to have the safest railway system, and automatic train protection will give us that. Early warning systems will achieve that level of safety more quickly than I could implement automatic train protection, but I await the report of Lord Cullen, who is taking into account the Uff inquiry and Sir David Davies's report on these matters.
On new lines, the London transport plan to which I referred, and on which the Mayor will report in the autumn, considers the new cross-London line, as my hon. Friend knows, and the east London link, which will connect the underground and the surface railway system. I am glad that, through our negotiations, we were able to establish the new channel tunnel rail link, which is in its first phase and is now on budget and on time. We rescued that from collapse when we came into office. The second stage will provide us with a new line, and we are all looking forward to that. So there are new lines, as well as enhancements to the system.
With regard to public-private partnerships, we will lay down targets and keep the passenger in mind as we modernise the system. The passenger has priority in our considerations. We will set tough targets, and tough penalties if they are not achieved by the companies. I am sure that my hon. Friend's Committee will examine the contracts when they are issued.
On new investment, the decision to bring forward the date for removing slam-door stock was a good decision in the interests of safety, and means that the industry can concentrate on the long-term target of securing investment to provide the new kind of trains that we want on our railway system.
Mr. Don Foster: Unlike the hon. Member for North Essex (Mr. Jenkin), may I on behalf of those on the Liberal Democrat Benches categorically welcome the Deputy Prime Minister's statement? After 18 years of a Conservative Government, public transport was left in crisis and there was massive congestion on our roads.

557
However, I hope that the right hon. Gentleman will understand the anger and frustration of many at the fact that, in the first three years of a Labour Government, there have been real-terms cuts in investment in public transport. The situation was not quite as the Deputy Prime Minister said—win, win, win, and win again. It was lose, lose, lose, and only now are we beginning to win, and we welcome that.
Can the right hon. Gentleman, first, assure the House that, after 10 years of the plan, he expects that there will be less traffic on our roads than at present? Secondly, given that he rightly said that we need early measures to prove his commitment and to improve people's environment, lives and road safety, such as safe routes to school and 20 mph limits, will the right hon. Gentleman give a clear assurance that the necessary money will urgently reach local government?
Thirdly, can the Deputy Prime Minister explain why he said in his statement that there would be additional money for the maintenance of local roads at local authority level, yet in the comprehensive spending review document issued two days ago, the amount of money for local authority road maintenance remained constant at the current level?
Finally, can the right hon. Gentleman tell the House what assurances he has been given about the security of the important and welcome private finance that he is bringing in, and why, given the Select Committee reports on the PPP for the National Air Traffic Services and for the tube, both of which were rejected, he sees that as the only appropriate way of bringing in private finance?
Mr. Prescott: I thank the hon. Gentleman for his warm support of our document, but I cannot accept his criticism that we made no improvement in the past three years. I tried to highlight some of them. I do not want to repeat them, but they include more services available on the railways—4,500 of them—and 2,000 new bus services in the rural areas. Those are definite improvements, although I acknowledge that we undertook not to spend more than the programme that we inherited.
To be fair, the Tories' programme of expenditure in the first two years after we were elected anticipated a cut of £1.8 billion. We kept those resources instead of cutting them, but that was not sufficient to meet all the demands. We made a choice, which affected the road programme in particular, largely because we took the view that, if we could get the public finances into proper order, we could begin to enjoy the level of public investment that was needed. That decision was right, although it led to some criticism about whether we were doing enough.
The local government transport plans will be presented to me in the next month or so, and I will make a decision in December. The plans will include recommendations for by-passes, of which there are 100. The Opposition spokesman was confused about that. There are to be 50 rural and 50 urban by-passes, making a total of 100. The hon. Gentleman would have benefited from reading the report.
Local transport plans have been allocated £59 billion in the programme, and £30 billion of that is directed towards improving road maintenance. We have caught up with the backlog. After all, when we came to power, we were told
558
clearly, and the view persists, that the condition of our roads was the worst since records were kept. We have cut the backlog on inter-urban roads, and £30 billion out of the £59 billion is for the towns, where great problems exist.
On the point about more cars and more roads, I have made it clear in several exchanges here that the growth in the number of cars and other vehicles on our roads has decreased from 8 to 2 per cent. There is therefore some decline. My job is to find a better public transport system so that people can begin to choose to use their cars less and public transport more. That is behind much of the programme; two thirds of the money that I have announced will go towards improving public transport.
I still maintain that public-private partnerships for the underground and NATS are the best way in which to proceed. I hope that I shall be able to demonstrate that.
Mr. Clive Efford: If anybody needed reminding of the reason for the parlous state of transport when we came to power in 1997, the statement of the hon. Member for North Essex (Mr. Jenkin) did that. He had nothing to say about public transport; he did not mention buses once. That demonstrates the Conservative party's attitude to transport and the reasons that we were in such a mess.
I worked in London's public transport service for 12 years. The £3.2 billion that my right hon. Friend has announced today will be most welcome. However, I draw his attention to plans for the East London line, which I also welcome, and the orbital route that is planned around London. That route does not turn eastward towards south-east London. As I never tire of reminding the House, south-east London does not benefit from the London underground. People who travel to central London rely on the rail network, which is overcrowded at peak times. We need alternatives to Network South-East for people who travel to central London. With the east London river crossing for the rail link of the East London line, can we also have a scheme for a link to the south-east?
Mr. Prescott: I have some sympathy with the points that my hon. Friend has made to me on several occasions, both publicly and privately. The Mayor now knows the resources that are likely to be available to him, and he can begin to take them into account in his transport plan. There is considerable investment in new lines and in modernising the existing system. I am sure that my hon. Friend's constituents will benefit from that. I tell my hon. Friend to keep pressing me, but also to get on to the Mayor.
Miss Anne McIntosh: May I return the Deputy Prime Minister's focus to rural transport? He set up the Commission for Integrated Transport in July last year; why did not he insist that it held at least one meeting to discuss rural transport? That would have led to positive input in the 10-year transport plan.
As the right hon. Gentleman knows, figures for road safety in North Yorkshire are the worst in the country, not because of the drivers who live there but because of the high proportion of transit traffic on those roads. I make a plea to the Deputy Prime Minister to recognise the rurality and sparsity factors and the additional miles of road that are covered by transit traffic in North Yorkshire.

559
I appreciate that the details may be in the document, but the Deputy Prime Minister said nothing about detrunking roads. If he is to proceed with his strategy of detrunking rural roads in North Yorkshire in particular, will he give the House a commitment today to give local authorities, in this case North Yorkshire county council, additional funds to maintain roads at a higher standard than currently applies?
Let me consider—
Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Lady has had her share of questions.
Mr. Prescott: The House is aware that the hon. Member for Vale of York (Miss McIntosh) has many interests in rural areas. I well understand that, knowing the beautiful part of the country that she represents. She will know that our increase in bus services in rural areas has benefited many parts of North Yorkshire. There was an initial difficulty when the North Yorkshire local authority refused the £1 million that was available to it. The local authority claimed that it did not know how to use it. It has subsequently found ways of doing that. It was a Tory local authority, and I do not understand why it found it difficult to provide good transport services for the people of North Yorkshire. However, I shall continue to make the case.
The roads and the priorities for the areas that we are discussing are under consideration in multi-modal studies and the regional reports. I expect to receive the reports in the autumn and the spring, and I hope to make statements about them later.
Mr. Dennis Skinner: Does my right hon. Friend recall that we had serious discussions about improving the infrastructure in the old coalfield areas, where as many as 2,000 people would have been working down a hole in the ground? To provide a lot of work on the pit top, we needed to ensure that the infrastructure was correct. He might also recall the discussions and decisions regarding proposed junction 29A of the M1, which could provide about 9,000 jobs for three adjoining constituencies in north Derbyshire, where there is not a single pit left after the Tories got rid of them all. Can he give me an assurance that the Government still have that idea on board and that it will be pursued in the 10-year plan?
Mr. Prescott: Yes, I well remember junction 29A, which was greatly discussed in the coalfield communities. We have changed the regional planning guidance for those matters to take fully into account the difficulties that our coal communities experienced after the massive pit closures and the matter is still very much on board. We are reviewing the programmes and I hope to give an answer by the end of this year or the beginning of next.
Mr. Christopher Chope: Amid all the hype, why is the local authority road maintenance budget not increasing?
Mr. Prescott: The sum is £30 billion, which is the highest ever given to road maintenance—considerably higher than when the hon. Gentleman was a Transport Minister. He presided over a transport policy that led to the mess that we are trying correct.
Dr. Howard Stoate: My right hon. Friend will be aware that lack of adequate transport infrastructure
560
is a major challenge that threatens the expansion of the economic regeneration of north-west Kent. How will his plans achieve adequate transport infrastructure for north-west Kent while safeguarding the environment and the quality of life of people in my constituency?
Mr. Prescott: My hon. Friend will know from his constituency that there is considerable call for investment, whether in road or in rail, to meet economic demand. His constituency is in an area of important economic development and we are looking closely at the infrastructure. Roads certainly have a part to play in assisting with the process, as does the new channel tunnel rail link. Our road review document, which we announced to the House about a year ago, made the criteria clear—not only economic factors, but environmental, safety and congestion issues have to be addressed. Those are being considered and we hope to make a statement on the regional reports at the beginning of next year.
Sir David Madel: The chief executives of the Highways Agency and of the Government office of the east of England have both visited Dunstable to see the huge congestion there. Does the Dun stable bypass feature in the 100 bypasses that the right hon. Gentleman has announced? There is £60 billion for the railways. Will part of it be used to reopen the disused railway line between Dunstable and Luton? If so, that will also be welcomed in the town.
Mr. Prescott: I can well recall individual Members spending a lot of time asking about particular roads during my 30 years as a Member of the House. [Interruption.] I am saying that I am trying to take regional and local factors into account. Local transport plans are given to us each year and a five-year plan will be announced after full representations have been taken by December. Those plans will make recommendations for bypasses and roads and I shall consider them. Of course bypasses can play a part on some strategic routes in both rural and urban areas and I shall take representations from the strategic regional review bodies and the development agencies. All that will enable us to identify those roads over the next six months. The 40-odd roads in the preferred programme that I announced to the House are under way.
Mr. Bill O'Brien: I congratulate my right hon. Friend on his statement and the work that he does to try to improve this country's transport system. He referred to pedestrians and walkers. Sadly, the Opposition spokesman did not. May I impress on my right hon. Friend the importance of catering for pedestrians in town and city centres? Will he give an assurance that pedestrianisation schemes will be retained, maintained and extended wherever possible? Will he give a further assurance that he will listen carefully to meaningful consultation on his waterways document and develop still further the canal and waterways system throughout the United Kingdom?
Mr. Prescott: Yes, I can assure my hon. Friend that in the transport plans we are encouraging local authorities to undertake more and more pedestrianisation. There is no doubt about pedestrianisation any more although a few years ago a lot of hon. Members protested that it would be bad for business. Most now feel that pedestrianisation

561
is good for cities, good for business and good for pedestrians. We shall have more to say about that in October in the urban White Paper which will deal with improving the quality of life in our cities, and in a separate White Paper on rural areas.
Having watched the development of waterways—I come from a part of the country where there are many—I am pleased that a week or so ago we announced a change in policy, which allows waterways to become part of the urban environment rather than leaving them to waste away. They should not be a liability on the taxpayer, requiring more and more taxpayers' money. In regenerating our urban areas, public and private partnerships have used waterways to open up many of our cities.
The waterways in Birmingham, Leeds and other cities used to be shunned. They were in parts of the city where nobody wanted to go, but they are now at the heart of urban redevelopment and contribute considerably to the quality of life there. It is noticeable that more people are returning to live in cities where that kind of facility has been turned from a liability to an asset. That is another major change that we have made in transport policy.
Mr. Stephen Day: The Deputy Prime Minister will be aware that the previous Government gave a starting date for the completion of the Manchester airport eastern link road, which would have helpfully linked the airport after which it is named. It also gave a starting date for the Poynton bypass to the east. The Deputy Prime Minister came along and cancelled both schemes, which are now subject to a multi-modal study in which we must rehearse the arguments of 20 years of public inquiries on those schemes. Will road schemes subject to such multi-modal studies remain in that position or will they now have some chance of being given the importance that the previous Government gave them?
Mr. Prescott: We decided to finish with the wish list that seemed to dominate an awful lot of discussions in this House, and we chose our priorities and the criteria according to which they would be judged. I can reassure the hon. Gentleman that we are completing the Manchester motorway box—it will be finished by the autumn, I think—and the inner link road, bearing in mind the Commonwealth games that will take place in Manchester. We are also investing £500 million in the light rail system.
The hon. Gentleman asked about the multi-modal studies. Some of those are already beginning to report. The fact that schemes are in multi-modal studies gives them greater priority.
Ms Joan Walley: May I pay tribute to my right hon. Friend's long-standing commitment to improved transport for the long term? In light of today's announcement, does he plan to review his guidance to local authorities, which may be in the course of submitting their local transport plans based on the sums previously available, rather than the increased public spending that we now have? In terms of minor
562
improvements to highways, can he shed any light on whether more money will be made available for street lighting?
Mr. Prescott: On the last point, I can assure my hon. Friend that extra money is being made available for street lighting. It is an important investment for safety and for crime reduction, both of which cause considerable concern.
My hon. Friend asked whether local authorities will be advised of the extra resources available. The point of today's statement is to give local authorities an idea of the moneys that will be available not only in the first three years, but in the longer term. That will help them with their local transport plans, which will be given to me in line with the White Paper. The plans are to be for five years, so local authorities have a longer-term perspective to meet their transport requirements. That will be good for areas that want to take long-term decisions and have a proper guarantee of investment.
Mr. A. J. Beith: I welcome the Secretary of State's reference to the Al and the study that he announced today. Can he assure me that safety factors, which present an overwhelming case for the dualling of that major road, neglected for so many years, will be fully taken into account? Will he bear in mind that his safety targets could be assisted by ending the head-on collisions that lead to deaths and serious injuries on that road?
Mr. Prescott: Yes. The right hon. Gentleman makes a powerful point. I was discussing that matter earlier in his region, and I have brought forward the multi-modal study that we set up and we hope that it will report by next year. His arguments about safety considerations on the southern part of the A1, north of Newcastle, are important, and we are dealing with those. Indeed, I believe that there is an argument for a strategic road for Scotland, although that matter would have to be discussed with the Scottish Executive. It would complete what I would consider to be a natural strategic road running from north to south.
Mr. Lawrie Quinn: My right hon. Friend is a frequent visitor to my part of North Yorkshire, and he knows that the legacy of the Conservative party has left transport policy in a total mess. Will he explain to the House how the multi-modal studies on the A64 corridor relate to the regional dimension, and how we can ensure that the regions deliver this policy?
Mr. Prescott: Multi-modal studies take into account the criteria set out in the road programme, such as the economic requirement, environmental considerations, safety and relieving congestion. Safety is a major consideration, especially with regard to the A64. Provided that multi-modal projects meet those criteria and fit into the regional assessment, they will be built and will be given priority. Although road building may be the solution to some congestion problems using a multi-modal approach, some problems may be solved by public transport, and we want to provide both.
Mr. Peter Brooke: Given the read across into other integrated transport considerations, what are the Government's plans for new runway capacities in the south-east?
Mr. Prescott: That industry has been growing for a considerable time. The issue is very controversial to say the least. There is considerable capacity in the south-east. We are approaching airport authorities about this matter, which is complicated, as the right hon. Gentleman well knows. In my role as a planning Minister, I will consider the terminal 5 proposal. That has a major effect on the assessments of airports in the south-east. I cannot say more than that, except that the study has started.
Mr. Syd Rapson: May I raise three issues of importance? If the answers cannot be given now, I would welcome an answer later. First, has the Portsmouth light rapid transport scheme been successful? Secondly, will the Department endorse the innovative private finance initiative scheme for roads maintenance, which is a real leader in its field? Finally, the right hon. Member for South-West Surrey (Mrs. Bottomley) and I would be interested to know whether there is any news on the possibility of a bypass in Hindhead.
Mr. Prescott: I have made it clear to those authorities considering their transport plans that we are including 100 bypasses in the programme—50 in urban areas and 50 in rural areas. Some of them are to deal with congestion in the town and some are strategic. My hon. Friend should press his local authority to ensure that a bypass is included in its transport plan. Local authorities have responsibility for improvements in towns and roads through their local transport plans, which include bypasses. [Interruption.] I do not know whether the hon. Member for North Essex (Mr. Jenkin) knew that, but he does now.
We are well aware of Portsmouth's application for a light rail system. We are building 25 LRT schemes. The hon. Member for North Essex made a fair point when he said that I had been critical of light railways compared with buses. That is true, but I have since been converted. [HON. MEMBERS: "Ah!"] I am sorry, but I considered the facts and although they are more expensive—which was my criticism—more people would prefer to use a light railway rather than a bus. Light railways are more expensive, and make sense only in certain cities, but we have included 25 such schemes in our programme. I confess to a change of view. What is wrong with that? Is not that what analysis and the use of intelligence is about—qualities not too often shown by the hon. Member for North Essex.
Mr. Michael Howard: In view of the additional resources that the Deputy Prime Minister now claims to have available, will he reconsider the need to resurface the M20 between junctions 10 and 12 to alleviate the noise nuisance from which many of my constituents suffer? Will he also undertake to provide a permanent alternative to Operation Stack, which denies the use of the motorway to my constituents whenever there is a delay to cross-channel traffic?
Mr. Prescott: I shall write to the right hon. and learned Gentleman about his last point. There are problems with
564
managing traffic when it is backing up for one reason or another. I understand his point, and I shall look into the matter. Management schemes can make traffic flows much better, and they are almost inevitable in difficult circumstances. I do not have a firm answer at the moment, so I shall write to him.
The right hon. and learned Gentleman mentioned noisy roads, which clearly create a lot of problems. Even a new road that I opened quite recently turned out to be much noisier than expected. Therefore, we have made a commitment to resurfacing 60 per cent. of trunk roads where noise levels are far too high.
Mr. Jeremy Corbyn: I warmly welcome the general thrust of my right hon. Friend's statement and the huge investment in railways and light rail structures throughout the country. As the money that is being invested in railway developments will end up in the ownership of Railtrack, which is not a publicly owned company, what will happen to the capital return that will benefit Railtrack shareholders? What control do the public have over the ultimate destiny of any land currently owned by Railtrack that may be disposed of in future for capital gain? Surely there is a democratic argument that if the public are putting a vast amount of money into the railways, we should have ultimate control over what happens to it.
Mr. Prescott: We have decided to keep the railways in their present privatised form. As I have said in the House, and even at party conferences, to take the alternative of nationalising the railway and finding some £12 billion is not our highest priority in present circumstances. In addition, I am bound to say that the current procedure allows public-private partnerships to discuss a 10-year plan, which could not be guaranteed by the Treasury. At least it is written into contracts—[Interruption.] If obligations are not met and the contract is broken, we can take back the resources. That seems quite a clever idea. We are not against good ideas and getting the best value for public money. It is a pity that the Conservatives did not take the same approach in a number of respects.
My hon. Friend referred to the money being put into Railtrack. It is going towards enhancement and new track. The Government sometimes have to provide money in order to encourage people to do certain things. As my hon. Friend well knows, we provide a subsidy—I used to refer to it as the PSO or public service obligation—to the operators, which also goes to Railtrack. We are bound to give Railtrack some public money and we have to make a judgment about whether it is accountable. Accountability is very important. We lay down the conditions and we have a pretty tough regulator now—much tougher than before—to make sure that the public interest is maintained. In addition to a certain amount of public money for borrowing and for public-private partnerships, the modernisation fund of £7 billion will allow us to expand the railway system with greater accountability than at present.
Mr. Michael Jack: Many motorists who have contributed to the extra £135 billion of tax in the Government's coffers by sitting in traffic jams on the M6 will welcome the Deputy Prime Minister's commitment to widening parts of the motorway. However, can he clear up a confusion? I received a letter from his Department

565
indicating that it will be some two years before the multi-modal study is completed and decisions are made, yet the Deputy Prime Minister seems to be committing to immediate action on the widening of the M6. Can he give us a timetable in respect of the M6? It needs action now.
Mr. Prescott: It is a pity that action was not taken 10 years ago. I do not recall the right hon. Gentleman asking for it then. Some multi-modal studies will be reporting in the next couple of months, but others—of which the M6 is a classic example—are more difficult to conclude. The right hon. Gentleman was a Minister in the previous Administration. They came up with the idea that the only way to reduce congestion on the M6 was to build the Birmingham northern relief road. They took that decision in 1988 and announced that it would be on the fast track. Twelve years later, the sod still has not been cut. That road would have helped to reduce congestion, but because there is such a lousy contract I am finding it difficult to force the private sector to face up to its obligations and invest in the Birmingham northern relief road. Hopefully, it will happen. I am doing my best to implement something that the previous Administration tried to do nearly 20 years ago. Hopefully, I shall conclude that shortly. The multi-modal studies will start reporting in the next few months and we will be able to get on with the job.
Mr. Mark Todd: May I draw my right hon. Friend's attention to the proposal in my constituency and neighbouring constituencies for reopening the Leicester to Burton line to passenger traffic? Currently, a bid for the project is being deterred by the framework for public finance that is available to support it. Will he meet local representatives to explore a potentially successful bid in the light of his new statement, which promises extra resources?
Mr. Prescott: I take it that my hon. Friend is referring to the Ivanhoe line. An agreement was arrived at between the local authorities, the Government and the people involved in the project. I am well aware that they are asking for more money to be provided. My noble Friend the Minister for Transport will be delighted to meet my
566
hon. Friend to discuss the matter, although I am more interested at this stage in the expansion of the railway system than in arguing about the contract.
Sir Teddy Taylor: As we have appalling congestion problems in Southend, and as the newly elected council is wholly in support of a ring road, can the Secretary of State say whether there are any new procedures for the consideration of cases under the new programme? What is the best way for an authority to urge its special problems for consideration for the additional funding?
Mr. Prescott: I do not think that there are new procedures in that sense, except that local authorities and regional bodies are considering local and regional roads and will make recommendations in the next six to eight months. We will then make a judgment on the priorities for roads and what resources we will provide. My announcement today is that more resources are available to meet some of the requirements, but the criteria laid out in our roads programme will have to be met.
Ms Rosie Winterton: As a member of the RAC's public policy committee, may I assure my right hon. Friend that the RAC, as well as the AA, has warmly welcomed today's announcement, and especially the extra resources for road maintenance, bypasses and motorway widening? Will he assure me that he will continue to consult those organisations, so that motorists' views and priorities can be taken into account in the implementation of the plans?
Mr. Prescott: I welcome what the RAC and the AA said. In my three years in office, I have not always had such favourable responses, so I welcome a genuine response from the motorist organisations to what I think is a very good plan.
On consultation, we set out in the White Paper the motorists charter and what we thought could be done to improve things for the motorist, which involved roads as well as vehicles and safety matters, because motorists are pedestrians as much as they are motorists and an overall approach is needed. We certainly intend to consult those organisations. As my hon. Friend will know, a body has been set up in the Department to discuss matters with them, so their views are fed into our transport priorities.
Several hon. Members rose—
Mr. Deputy Speaker: Order. I have no doubt that we will return to these matters in the future, but we must now move on.

Points of Order
2.8 pm
Mr. Peter Brooke: On a point of order, Mr. Deputy Speaker. At business questions, I unintentionally misled the House, and I would like to take the earliest possible opportunity to correct that. I ascribed wrongly to the Prime Minister references to £24 billion yesterday. I know why I made the mistake, but I should not have passed it on to the House. I apologise unreservedly.
Mr. Deputy Speaker (Mr. Michael Lord): There is no need for me to respond to that point of order. The whole House will have heard what the right hon. Gentleman said.
Mr. Eric Forth: On a point of order, Mr. Deputy Speaker. I seek your guidance in the matter of the forthcoming election of a new Speaker, because of the rather unusual circumstances, in that the House will be in recess for a long time and then come back directly to face that election, and because my impression is that there may be a number of candidates. Can you help the House, not necessarily today, but certainly before we rise, by letting us know exactly what procedure will be followed when we come to elect a new Speaker on 23 October?
It is essential for Members, and indeed the candidates, to know the basis on which the resolutions will be put to the House and the sequence in which amendments may be introduced, so that we can make an assessment in the intervening period of candidates and of proposers and seconders, and then of the procedure to be followed. Otherwise, there is a danger that the House will be faced on 23 October with what might amount to a lottery, which would not be in the interests of the House, its Members or our future Speaker.
Mr. Deputy Speaker: I am grateful to the right hon. Gentleman for giving notice of his helpful suggestion. The Speaker is giving the matter careful consideration. I have been asked to assure the House that Members will be given clear advice in good time about the procedures to be used on 23 October.
Mr. Jeremy Corbyn: Further to that point of order, Mr. Deputy Speaker. You mentioned that the Speaker would give us clear advice in good time. Could I ask you to address the Speaker on the subject to ensure that we have clear advice given to us before the House rises for the summer recess? Could consideration be given to a more democratic and open procedure than the current one, under which a person is nominated and faces a series of Divisions with any other candidate? Is there anything wrong with having an election? The rest of the country does—why not have one here?
Mr. Deputy Speaker: At this point I cannot add to my earlier statement. The House will note the point made by the hon. Gentleman.
Mr. John Bercow: Further to that point of order, Mr. Deputy Speaker. I, too, seek your guidance. As the forthcoming election is a matter for the legislature
568
and not the Executive, and in view of growing concern that the Government Whips will seek to browbeat people into voting for their preferred candidate, can we have guidance on the possibility of ensuring that the election will be conducted by secret ballot?
Mr. Deputy Speaker: Order. As I understand it, these matters are all laid down in the Standing Orders. As I have said, Members will be given clear advice before the date concerned.
Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. I spoke to the Speaker in the Chair earlier, and I am aware that she does not take points of order during proceedings. However, I would be grateful if you could refer this matter to her. Today, as is normal practice, the Chancellor decided to answer two questions at the same time. He gave notice of that to my hon. Friends the Members for Congleton (Mrs. Winterton) and for Guildford (Mr. St. Aubyn). The two questions were dissimilar, except that they did deal with the issue of the single currency. The House will see from Hansard that the Chancellor did not attempt to answer the second question at the same time as the first and appeared, by a device, to avoid taking that individual question.
Mr. Deputy Speaker: Order. I have heard enough from the hon. Gentleman to understand his point of order. He well knows that the Chair does not have responsibility for ministerial answers.
Mr. Bruce: Further to that point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: I have dealt with that point of order.
Mr. Dennis Skinner: On a point of order, Mr. Deputy Speaker. Reverting to the points of order on the subject of the election on 23 October, one of the problems is that the Procedure Committee met after the last election in 1992, when there was a proposer and an amendment and the amendment in the name of the current Speaker was successful. Arising out of that, on Wednesday last, I sought the advice of the Clerk with a view to seeing whether the Procedure Committee had made any recommendations for change, because of concern at the time that at least one candidate—a previous occupant of the chair as Deputy Speaker—was not allowed to stand. It seems that the Procedure Committee has discussed the matter, but has come to no conclusion, other than that we will carry on with the current procedure. The Speaker should look into the question of how to overcome the Procedure Committee's recommendation because there is no doubt that there is a groundswell of opinion in the House that there should be a multi-choice election in which people can vote openly for their candidate.
Reference was made earlier by the Opposition to a secret ballot. We do not want secret ballots in the House of Commons. Every single vote that is cast in the House of Commons is cast in the Lobby so people know exactly how we have voted. I find it fanciful that a Tory Member is now recommending secret ballots in the House of Commons.
Mr. Deputy Speaker: I have listened carefully to the hon. Gentleman's point of order. I do not think that I can

569
add to the response I gave initially to the point of order. I am sure that everybody will have heard the points that have been made.
Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: Is it a different point of order?
Mr. Bruce: Well, it is the point—
Mr. Deputy Speaker: No. I have dealt with that point.
Mr. Bruce: On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: Is it a different point of order?
Mr. Bruce: It is a different point of order.
Mr. Deputy Speaker: Entirely different?
Mr. Bruce: It is entirely different because it is the original point that I wished to make.
Mr. Deputy Speaker: If it is the original point, it can hardly be a separate—[Interruption.] Order. If it is the original point, it can hardly be a separate point of order. I have already dealt with the hon. Gentleman's initial point of order and I am not prepared to listen to him any further on that point.
Mr. Bruce: On a completely different point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: Order. We must now move on to the main business.

Public Expenditure
[Relevant document: The Minutes of Evidence taken before the Treasury Committee on 10th May (Spending Review 2000), HC 485-i.]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jamieson.]
Mr. Deputy Speaker (Mr. Michael Lord): May I advise the House that Madam Speaker has placed a time limit of 15 minutes on all Back-Bench speeches?
2.16 pm
The Chief Secretary to the Treasury (Mr. Andrew Smith): I commend the spending review and the White Paper to the House. but let me start on a note that I hope the shadow Chief Secretary to the Treasury and his right hon. Friends will endorse. I doubt whether they will find much else in my speech to endorse, but anyone who has seen from the inside the phenomenal amount of work that goes into a public expenditure review will know just what a vote of thanks we all owe to the officials, who often work long hours under pressure to meet the demanding deadlines of such an extensive exercise. We see here the civil service and the Treasury at their best.
As well as policy advice, we have all the energy and dedication that goes into administration, co-ordination and information. Without it, we could not complete a spending review and Parliament and the public would be denied the quality and objectivity of information necessary for informed debate. I place on record our thanks for the high standard of that enormous effort.
The political choice, though, is ours. The Government have made our choice, built on a solid foundation of stability. We have chosen to make a prudent investment to improve key front-line services and to upgrade our infrastructure.
With Labour, people know that those who need care will get better care and that children and adults will be helped to achieve higher standards in education. We are strengthening the hand of the police in fighting crime and making our communities more secure, improving our transport system and tackling the drugs menace. So when we now commit to real average increases of 5.7 per cent. in health, 5.4 per cent. in education, 3.8 per cent. in policing and 20 per cent. in transport over the next three years, we are addressing the public's priorities for better health care, properly equipped schools, less crime in the estates and elsewhere, and better journeys to work and to shops.
We have no doubt that, building on the progress that we have already made, people want to see investment in these and other front-line services. The challenge for the Conservative party is to say where it stands. What is it that it is guaranteeing?
Not so long ago, the shadow Chancellor of the Exchequer was keen on guarantees. On GMTV three months ago, he said of the tax guarantee:
It is a guarantee of honesty.

571
Just three months later, refusing to answer five times the question of where he would cut spending, what did the man who had made the guarantee his hallmark of honesty say?
I'm not getting into the business of guarantees.
Mr. John Bercow: Given that the right hon. Gentleman has already admitted that he is this year spending £20 million on the national handover plan, and the further evidence from national health service trusts that an extra £95 million is being spent on proposed conversion to the euro, is he proud of the fact that he is plotting the abolition of our national currency with resources that would otherwise pay the annual salaries of 7,500 nurses?
Mr. Smith: With the huge investment going into information technology and computers it would be foolish not to make the alterations which have to be made. It is no change on the plans and policies that we have announced on this for the future. The hon. Gentleman and his hon. Friends must tell us where they will find the £16 billion of cuts. Not from that, evidently. He, the shadow Chancellor and the rest of them claim that our spending settlement is unaffordable, but they refuse to say where their cuts would fall.
The other night I had some sympathy for the right hon. Member for Wells (Mr. Heathcoat-Amory), who was left forlornly to wander the television and radio studios with no intellectually coherent argument whatever to make against the shadow Chancellor's statement. After all, it follows arithmetically that if the Tories are saying that public spending should grow at 2 per cent. instead of 3.3 per cent., they must be committed to cutting our programme by at least that £16 billion. The Tory research department has accepted that figure in this helpful document. Hon. Gentlemen must now tell us where that axe will fall.
The document takes us some way further forward. It helpfully includes at the end a table, by region, of where £16 billion of cuts, allocated in proportion to taxpayers, would come. It would be £1.8 billion in London, £3.84 billion in the south-east, £606 million in the north-east, £1.4 billion in Scotland and £714 million in Wales. Let Tory Members put on record today for all their constituents to see where they would cut health, which schools would go without and which bits of police spending they would hack back.
The Tories are frightened to do that because they know that it would be unpopular. They try to have it both ways and to con the electorate. That comes out most clearly from the model news releases and briefs, again helpfully prepared by the Conservative party research department, which suggests that hon. Gentlemen use them. I cannot see many hon. Members clutching them this afternoon, however. They are obviously embarrassed by the product of their research department.
Let me show hon. Gentlemen which one I am looking at. It is this one. It provides some further information, but it is hardly profound stuff from the party of "lower but better" spending. It says of transport:
We believe transport is important … We want to get more money into transport.
572
It says of agriculture:
We believe agriculture is important … We also want to get more money into rural Britain.
It says of education:
We believe education is important … We want to get more money into education.
So the document goes on. Even on social security it has the nerve to say:
We believe social security is important.
Mind you, Mr. Deputy Speaker, it also says:
We believe all the areas covered by DCMS are important.
It is clear from the documents that on education, transport, law and order and the public services, the Tories do not commit to the investment that we are making. They cannot do so because, they argue, our spending plans are somehow imprudent or unsustainable. They are wrong on both counts.
Mr. Richard Livsey: The Chief Secretary rightly castigates the Conservative Opposition for their wish list and the £16 billion hole in their budget. Will he tell me whether there were discussions prior to the settlement on public expenditure about public expenditure match funding to go with European objective 1 funding for Wales? We are grateful for the European public expenditure survey cover, but we do not appear to have public expenditure for match funding.
Mr. Smith: I find those remarks surprising, given the warmth of the welcome for our spending review announcement and the benefit that it brings to the objective 1 areas in Wales and the regions. The 5.4 per cent. real increase for Wales, as well as the objective 1 public expenditure cover which we have provided, will more than facilitate match funding and enable west Wales and the valleys to benefit from objective 1 funding to the full.
I was dealing with the Opposition's argument that our plans are imprudent or unsustainable. We have put these plans forward on very cautious assumptions. The assumption of 2¼ per cent. growth is based on the figures published in the Red Book. These assumptions are tested against trend output, which is 1 per cent. lower than that. It is there for all to see, on page 8 of the spending White Paper, that even if growth were lower, we would meet the golden rule.
These cautious assumptions on growth, unemployment and market expectations of interest rates have all been audited and confirmed as reasonable and prudent by the National Audit Office. They are affordable within the Budget arithmetic in the Red Book, which shows the tax share of GDP falling and which the shadow Chancellor endorsed the day after the Budget when he said:
The Red Book, which is the document that accompanies the Budget … shows that the Government expects the tax burden to fall during the next Parliament, which is exactly what we expect.
These plans are sustainable because of our cautious assumptions and because we have sorted out the public finances, so that not only is debt interest £5 billion a year lower than it was, and not only are we meeting the golden rule, but the projected current surplus goes from

573
£14 billion this year to £16 billion. £13 billion, £8 billion and £8 billion, with net borrowing lower in every year than in any year of the last Parliament.
Mr. Michael Fallon: The Chief Secretary described all these assumptions as cautious. What does he say to Goldman Sachs's assessment today that as a result of the public spending plans interest rates will be higher and the pound stronger?
Mr. Smith: The spending plans entirely meet the conditions that we set out in the Budget settlement. They therefore reflect that locking in of extra fiscal tightening. They are entirely within the envelope on expenditure—the 2.5 per cent. increase in current spending, and the doubling of investment as a proportion of GDP from 0.9 per cent. to 1.8 per cent—which we set out at the time of the Budget. There is thus no reason to expect the judgment on the macro-economic fiscal fundamentals to have changed since the Budget. These are prudent, sustainable plans both because we comply with our golden rule and, as I have explained, because we have straightened out public finances. This is prudent spending; it is spending for a purpose.
When the Tories were in Government, from 1979 to 1997, 42p of every extra pound they spent went on debt interest and social security. We will spend only about 17p in every extra pound we spend on debt interest and social security. More than 80 per cent. of our extra spending, then, goes to front-line services and investment.
The Tories do not have a leg to stand on with their claims of unaffordability or unsustainability. No matter how hard the shadow Chancellor wriggles around on spending, he cannot escape the logic that he would cut our plans, thereby putting a £16 billion axe to our crucial public services.
Caroline Flint: My understanding is that during the course of the Finance Bill, the Conservatives asked for concessions to the tune of £4 billion. Rather than £16 billion-worth of cuts, therefore, would the figure not be nearer £20 billion?
Mr. Smith: My hon. Friend is entirely right: the Conservatives crank this up by the day. They made spending commitments for an extra £4 billion during proceedings on the Finance Bill, and their document outlines all the extra spending that they say they want to put into services. That all adds to the figure of £16 billion, which is the logical consequence of moving from 3.3 per cent. expenditure growth to 2 per cent.
The Conservatives' position is unsustainable, and it will not be believed by the British public. With their record of broken tax promises, mounting debt, mass unemployment, inflation, and boom and bust, they cannot be trusted by the British people again. Their position is in clear contrast to ours—we want stability, investment, quality public services and a rebuilding of our country. With this review, the Government have made clear the next stage in the renewal of Britain.
Mr. Geraint Davies: I note from studying the statistics that the cost of unemployment
574
benefits will have fallen by 40 per cent. by 2001–02 from the time when the Government took hold of the economy. Does my right hon. Friend think that the Opposition will target expenditure cuts on social security? Where do they intend to make these cuts? Will they come from families, children, pensioners and people with disabilities? Even if the Conservatives squeezed the poorest as much as possible, they would have to go even further in cutting expenditure on health, education and front-line services. There is no place to make the sort of cuts they want, and the British public need to know that.
Mr. Smith: My hon. Friend is absolutely right. The Conservatives could not find that scale of spending cuts in social security which, along with debt interest, consumed 42p in every extra pound that they spent throughout their period in Government. It was actually 55p in every pound when the shadow Chancellor was Chief Secretary to the Treasury.
My hon. Friend is also right about the benefit to the fiscal position, as well as the incalculable benefit to individuals and their families, of the 1 million extra people we have got into jobs. That contributes £3.5 billion to our fiscal position, just as the savings on debt interest contribute some £5 billion. We are able prudently to undertake this investment because we have saved on the costs of unemployment and on that millstone of debt that the Conservatives strung around our neck.
The review represents movement through to the next stage in the renewal of Britain. Our first priority was to build a platform of economic stability, which is a crucial precondition to achieving stable and steady growth in a modern economy. We made tough choices to sort out the public finances. Our next goal was to provide employment opportunity for all—to get more people into work than ever before. With the help of the new deal, by making work pay, there are now 1 million more people in work than in 1997. Indeed, there are more people in work than ever before.
Now, as we maintain a platform of stability and continue to create new employment opportunities, we are investing in the future of our country—its public services, its infrastructure, its skills and its people. We are tackling that legacy of neglect, the years of underinvestment and the damaging short-termism. Tackling that was never going to be easy—we never said that it would be—but we are doing it and we are determined to build a Britain where there is opportunity and security for all.
What does the Conservative party want to do, apart from wielding its £16 billion axe? It wants to return us to the short-termism that saw our public services, infrastructure and skills base fall into decline and led our economy into boom and bust and stop-go. The shadow Chancellor has confirmed that approach. He told Sir David Frost that he would plan "year after year". The right hon. Gentleman plainly opposes setting out three-year plans; he claims that they are unsustainable. He is not getting into the business of guarantees; he would plan year by year. That would move Britain back to chronic short-termism—the boom and bust, the excesses, the unemployment, the high inflation and high interest rates, and everything else that did so much damage to our country before.
By contrast, we are moving Britain closer to our goal of opportunity and security for all. We are laying the foundations for the future—foundations for increased

575
productivity, a faster, integrated transport network, a renewal of Britain's neglected science and research base, and the investment that will modernise our schools and hospitals and give the police the increased resources that they need to crack down on crime.
What is more, our new spending plans are about delivering employment and education opportunity for all, building on the success of the new deal and our other policies that have helped more than 200,000 young people into work and cut youth unemployment by more than 70 per cent., just as we have cut long-term unemployment by more than 60 per cent.
As we take the next steps towards our goal of full employment, we recognise the importance of education and lifelong learning as the surest route to employment and employability. That is why education spending across the United Kingdom will grow by 5.4 per cent. over the next three years. Indeed, with the additional resources provided for education at the time of the Budget, over the four years to 2003–4 education will benefit from an annual growth rate of 6.6 per cent. in real terms—the largest sustained investment in our country's education for more than 50 years. In fact, over the five years covered by the Government's two spending reviews, education spending will have risen by 33 per cent. in real terms—more than it rose in the entire period of the Tory government, from 1979 to 1997. That is money for schools, teachers, books, new equipment—investment to give our children the best start in life.
Education cannot be limited to the few. In the 21st century, the need to learn new skills will be very important to adults who want to get on and make the most of their talents. We must tackle the scandal of the 2 million adults in Britain who have literacy and numeracy skills equivalent to those of a seven-year-old. That is why the settlement makes a commitment to investment in adult basic skills and education.
With extra resources comes the responsibility to deliver results. This spending review is not only about the amount of money that each Department will get, because with each allocation will come public service agreements to achieve real improvements in all our services. In education, we have set the target of increasing the percentage of 16-year-old pupils obtaining five or more GCSEs at grades A to G, including English and maths, to 92 per cent. by 2004, from the 86 per cent. that it was in 1997. These are resources for results.
Mr. Phil Willis: I am grateful to the right hon. Gentleman for giving way, and I apologise for arriving late for the debate. Does the Minister agree that the real challenge in our education system is not to raise the number of five A to C grades achieved but to deal with the 9 per cent. of young people who, under this Government, as under the previous Government, leave school with no qualifications and have no jobs or training? What target is the Minister setting for those young people? That is how people will judge the success of the Government's education policy, not by an arbitrary target of obtaining five or more grades at A star to C.
Mr. Smith: We are doing those things. There are targets for the numbers who will gain qualifications. We want to lever up the performance of those who leave
576
school with no qualifications. We are introducing education and maintenance allowances and giving extra help to those who have been denied it in the past. In our overall settlement, moreover, there is a particular concentration on the most deprived areas, which is where the problems of underachievement to which the hon. Gentleman refers are most acute.
Our next objective is to build responsible and secure communities across our country, where everyone has the opportunity to participate. In his statement to the House yesterday, my right hon. Friend the Home Secretary announced that he will tackle crime, with increases in spending over the next three years of some 3.8 per cent above inflation—money to recruit more than 4,000 police officers and to ensure that they are fully equipped with the latest DNA technology and modern communications, so that they can provide the service that every member of the community wants.
In return, the Home Office will meet its public service agreements; car crime will be cut by 30 per cent., burglaries by 25 per cent. and robberies in our major cities by 14 per cent.
Mr. Tim Loughton: In the event that the Home Office fails to meet those public service agreements, will its funding be cut? Will the Home Secretary have to come to the House to announce that the 4,000 promised policemen will not be funded?
Mr. Smith: The appropriate response in any instance of Government or agency policy underperformance is, first, to analyse properly the variations in performance and to adopt good and accurate measures of efficiency. Recently, the public services productivity panel published proposed measures of efficiency on that very issue.
Secondly, those measures should be applied, with a proper strategy to lever up standards of performance; resources should be available in return for performance and there should be graduated intervention—from improving strategy to changing personnel. That will be a crucial test of the efficacy of our investment. That is why we have set out performance targets in the spending review White Paper.
Mr. Bercow: Will the right hon. Gentleman give way?
Mr. Smith: I have given way several times; I am anxious to make progress.
We have announced plans for a neighbourhood renewal fund; £100 million, and thereafter £300 million and £400 million will be allocated to raising the quality of life in our most deprived areas. That crucial dimension of our settlement again sets us so much apart from the Opposition. When they were in government, they showed every sign of not caring for the poorest and most disadvantaged communities. The previous Government were content to tolerate conditions that they would not have wanted for themselves or any member of their family. That is why the Labour Government are investing in public services for all. We want to narrow the gap between the most disadvantaged in our community and the rest. The neighbourhood renewal fund will make an important contribution to that.
Mr. John Wilkinson: Will the right hon. Gentleman give way?
Mr. Smith: No. I want to make some progress.

577
Strong communities must mean healthy communities. On Tuesday, my right hon. Friend the Chancellor confirmed the allocation for our health service announced in the Budget: an average 6.1 per cent. real-terms increase—more than double the rate of growth achieved by the previous Government. Next week, my right hon. Friends the Prime Minister and the Secretary of State for Health will give more details of our vision for Britain's health. The resources are in place. The investment is committed. Our communities—individuals and their families—are benefiting from a commitment by the party that created the NHS, believes in the NHS and invests in it.
Our next objective is to raise Britain's productivity and to provide enterprise opportunity for all. For too long, the under-investment that has plagued our science and research base has hindered the development of our economy. The failure to match enterprising and innovative talent with resources has set Britain back. We have announced a major package of resources, covering every part of the country, to improve our productivity and to extend new enterprise opportunities so as to rebuild Britain's reputation as a global leader in scientific research. The spending review provides a real-terms increase in funding of about 5 per cent. a year until 2003–04, to improve our science and engineering base. That includes the £1 billion science research investment fund set up in partnership with the Wellcome Trust.
The plans announced this afternoon by my right hon. Friend the Deputy Prime Minister are crucial to our economic performance. We are doubling public sector investment in our transport system. In a modern economy, work force mobility is a key driver for economic success and increased productivity. By sharp contrast with the short-termism of the Conservatives, the initiatives set out today will make Britain a better place in which to do business, with a modernised infrastructure and better-quality public service provision.
I realise that there will be a time limit for Back-Bench speeches, so I shall draw my remarks to a close. In summary, the investment announced in the spending review is not only for individual initiatives or Departments; it will prepare our economy and our country for a new role in a modern world. Our approach is forward looking—based on stability and built on our fiscal rules. We are investing in our public services and in our science and skills base. We are strengthening our communities and our infrastructure and building a Britain where there is opportunity and security for all.
The policies of the Opposition are in complete and evident disarray. The Opposition have failed the most elementary economic tests. They failed to recognise the need to invest; they failed to see the damage that their policies did in the past and would do again, if they were given the chance. They divided Britain with cuts to services, underinvestment, short-termism and boom-bust—the same old mistakes from the same old Tories.
Our priorities are clear: investment in our infrastructure, in our skills and research base, in education, in our communities and public services. Those are investments not only in individual services, but in the well-being of our whole economy and society and in our country's ability to succeed in today's global economy.
578
While recognising that to flourish we must invest in our infrastructure, we realise the importance of investment for the long term, within prudent limits and supported by the fiscal rules that guide our planning at present as they will continue to do in the future. Those are the guiding lights of our economic approach and of the spending review.
The Government have made their choices: between stability and the stop-go of the Conservatives; between employment opportunity and unemployment; and between investment and public service cuts. Our choices and priorities reflect the priorities of the British people. I commend the spending review to the House.
2.48 pm
Mr. David Heathcoat-Amory: On Tuesday, the Chancellor drew a large cheque on the future. The figures are already disintegrating. Yesterday, the Institute for Fiscal Studies pointed out that the Chancellor's calculations were based on a hypothetical figure and that the figure of £43 billion was not meaningful. That was the amount that the Chancellor boasted would be allocated to front-line services.
If we compare last year with 2003–04, the real figure for the total increase in public expenditure is no less than £99 billion. That is almost 12 digits—a telephone number amount. It is a colossal amount and wholly unsafe.
That figure is not merely an aspiration. The Government are making an irreversible commitment to spend those sums over the next four years. Whatever happens to the economy, whatever happens to the global economy and whatever happens to the business cycle, the Government are locked into an expenditure commitment of that scale, way above their own projected growth rate for the economy.
It is not surprising, therefore, that the Bank of England has taken fright. It was told of these figures in advance, and the minutes of the last meeting of the Monetary Policy Committee record the fact that many of its members believed that if this was attempted, interest rates would have to rise in future. [Interruption.]
Mr. Deputy Speaker: Order. We cannot have these interventions from a sedentary position. The House listened very carefully to the Minister and it should do the same now.
Mr. Heathcoat-Amory: Thank you, Mr. Deputy Speaker. Labour Members may not like these facts, but they are going to listen to them because they are all based on the truth—either the figures in the Government's own document or comments by respected independent outsiders.
Mr. Andrew Smith: A few minutes ago, the right hon. Gentleman plucked out of the air the figure of £99 billion. Does that mean that he will cut £99 billion, or will he keep the cuts to the £16 billion that we have identified so far?
Mr. Heathcoat-Amory: I shall discuss the question of the year 2004, but before I discuss the expenditure that we shall be undertaking in that year, I shall discuss what the Government have been spending and taxing in the last three years. Let us look at the record; let us read the book before we attempt the crystal ball.

579
What we do know, beyond dispute, is that it is the taxpayer, particularly the poor taxpayer, who will have to end up paying for all this. How do we know that? Because it has all happened already, despite all the pre-election promises. We remember the Prime Minister saying that he had no plans to increase taxes at all. That is what he said before the election. It was never disputed, it was never contradicted and it was never corrected at the time. Despite all that, we have since had four Budgets, all of which have put taxes up. Road transport, savings, marriage and housing—they have all gone up, and in the Finance Bill, which the House debated last night, there is a new tax, the energy tax, which will be paid by all businesses from April next year.
What is really scandalous about this series of tax increases is that they are very often targeted on the poorest people in the country. In 1997, the Government abolished dividend tax credits. It is bad enough that that means taking £5 billion out of pension funds every year, which has led to a collapse in the savings ratio—which the Government do not dispute.
However, the terrible effect has been on some individuals—but not higher rate taxpayers, who were all protected against that particular tax increase. It is the non-taxpayers—the non-taxpayers relying on small savings—who now get no repayment. The Chief Secretary obviously finds that amusing. I invite him to do what I have done, which is to talk to one of my constituents, a Mrs. Pratt, who has written to me from Glastonbury. She has described how, last year, she received a tax repayment of £583; this year, she is not eligible for that. She actually has to make a tax payment.
Mrs. Pratt is 87 years old; she is blind and she is disabled. She has asked me to ask the Government why they are doing this to her. If the right hon. Gentleman wants me to debate mythical expenditure cuts in four years' time, I will go down to Glastonbury with him to tell Mrs. Pratt about our expenditure plans—if he guarantees to explain to her why he has taken £600 out of her income. That is the deal that I offer.
I also have a letter—I cannot be alone in having been written to by many constituents suffering in this way—[HON. MEMBERS: "You are not."] We have the example of Mr. Brian Speakman, who says that he wrote to the Chancellor—he has not had a reply, of course—asking how he had
the audacity to claim that this
child
tax credit replaces the married couple's allowance.
He explained how he would lose approximately £20 a month from his small pension. He finished:
I find that as a lifelong socialist, an ex Labour party member, with a son who is a Labour councillor … my vote will go elsewhere
in future. Those are real examples from real people.
Mr. Bercow: Do not both the record of the Government to date and their plans for the future underline the wisdom of what Lord Hattersley wrote in The Guardian on 13 March 1995? He observed:
Labour now has a clear choice. It can either be the party of higher taxes and proud of it or it can be the party of higher taxes which it is ashamed to describe, afraid to admit and incapable of calculating with any accuracy. It cannot be the low taxation party.
Mr. Heathcoat-Amory: My hon. Friend is absolutely right, and the Labour party, when it does not find taxing
580
poor people in this way funny, is in denial about it. The fact is—I am grateful to the Library for this figure—that the typical working family in this country is now paying an extra £670 a year. That is the record; so before we speculate about the future, let the Government admit that that is what they have done to working people in this country. After four Budgets in which the Government have done that, we may now be in an election year, so the Chancellor has gone on a spending spree.
Mr. Geraint Davies: Is the right hon. Gentleman aware of the regular Institute for Fiscal Studies reports after each Budget which show the distributional impact of each Budget? Is he aware that they show consistently for every Budget, and on aggregate for all the Budgets, that the bottom deciles of the population are consistently better off? Does he agree that when one looks at the distribution, it becomes clear that the bottom fifth in particular are much better off, and in fact no one is worse off? That has consistently been the shape of the distribution. That is in sharp contrast to the sort of things that have been thrown around in this Chamber in the last few days.
Mr. Heathcoat-Amory: That is flatly untrue. The bottom decile has actually had the biggest tax increases. On the question of figures, why have the Government dropped the previous Government's practice of publishing on Budget day the impact of all the taxes, direct and indirect, on typical households? We did that, and they dropped it. The Select Committee on the Treasury drew that to the Government's attention, without result.
Mr. David Ruffley: Does my right hon. Friend agree that the hon. Member for Croydon, Central (Mr. Davies) has completely misrepresented and distorted the IFS figures? The IFS makes it perfectly clear that the bottom decile figures to which he referred exclude housing benefit. Does my right hon. Friend agree with that?
Mr. Heathcoat-Amory: Yes. We are just hearing more of the fiddled figures, and I am disappointed that the hon. Member for Croydon, Central (Mr. Davies) has fallen for his own propaganda on these matters.
Mr. Alan W. Williams: We heard earlier about the lady from Glastonbury, and of course we all know that in our constituencies there are individual examples of gainers and losers. However, will the right hon. Gentleman say generally for elderly people how many losers there are, and will he compare that figure with the number of elderly people who now qualify for the minimum income guarantee and the number of working families who now qualify for the working families tax credit? I believe that something in the order of more than 1 million now qualify for the working families tax credit.
Mr. Heathcoat-Amory: The elderly lady who is my constituent is not at all unusual. What is more, the hon. Gentleman had an opportunity to help her, because we specifically raised that issue during consideration of the relevant Finance Bill when the dividend tax credit measure was taken through, and we gave the hon. Gentleman an opportunity to vote against it, which he failed to do. That is one of the points that I shall be making to Mrs. Pratt. The governing party just does not

581
care. It has taken £600 a year away from her, and all that the hon. Gentleman says is that other people are better off. That is not the way that she sees it, down in Glastonbury.
In assessing the comprehensive spending review that the Chancellor announced on Tuesday, we are entitled to look back at the other spending review—the one that the Government announced in July 1998, two years ago. We recall that the Chancellor promised an extra £19 billion for education and an extra £21 billion for health—an extra £40 billion in all. We know now that that has not worked. We have longer waiting lists, larger classes in secondary schools and fewer policemen. I think that the Government are learning that it is easy to tax. Indeed, that is the easy part of politics, and that is what the Government are good at. It is difficult, however, to turn people's money into the services that they want. That is a skill that the Government have yet to master.
It is hardly surprising that that observation is shared on the Opposition Benches and by the Chancellor's constituents. ICM conducted a poll of the right hon. Gentleman's constituents on Tuesday night. It revealed that 72 per cent. of his constituents said that they did not believe the spending figure that he promised for the future, the reason being that 79 per cent. of them said that public services were not improving. They have seen tax increases, but not an improvement in public services.
Mr. Christopher Leslie: When will the right hon. Gentleman tell us about his guarantees?
Mr. Heathcoat-Amory: In answer to the Chief Secretary, I said that I would describe what we might be doing in office in four years' time. I shall start by sharing with the hon. Member for Shipley (Mr. Leslie) the Government's record over the past three years. I can tell that he does not like it, but he voted for it and he must live with it.
We all agree that some things have increased since 1998 in the most recent expenditure review. For example, crime has increased. The number of political advisers employed by the Government has increased; in fact, it has doubled. It is probably double the number of leaks coming out of Downing street. The cost of central government is eloquent on Labour's priorities in office.
I refer the House to another Government publication in April entitled "Public Expenditure", which shows that the cost of running central government Departments, which was static or slightly falling in the years of the previous Conservative Government, has increased since then by more than £2 billion. There is the example of the Inland Revenue, which is in a bit of trouble for having wiped off its computer 5 million tax records. We do not know what has happened to them. Rather lamely, the Inland Revenue says
We haven't lost the records, we know they are in the system somewhere.
However, it cannot retrieve them.
That is the same Department that has employed an extra 12,500 civil servants. That is not explained by the new responsibilities that it has taken over from the Department of Social Security. The net increase in employees in all Revenue departments is thousands. From the point of
582
view of the taxpayer, that is entirely unproductive. The size and wealth of the state is increasing, but the wealth of businesses and taxpayers is not.
In addition, there is all the wastage, all the quangocracy, all the regional assemblies, the cultural consortiums, the taskforces and the bogus consultation exercises that the Government set up and then ignore. However, there are some things that are not in the comprehensive spending review documents. Where is the cost of converting to the euro? We know that the Government are committed to it, but where is it in their estimates?
Mr. Roger Casale: We have heard arguments before from the right hon. Gentleman about the cost of the changeover plan and the cost of central Government, for example. But does he agree with the right hon. Member for Kensington and Chelsea (Mr. Portillo), the shadow Chancellor, who has said that all the extra money spent on public services is money unwisely spent? If he does, will he come with me to Wimbledon to identify where he thinks that the extra money is being wasted or spent unwisely? For example, is it being wasted on the new accident and emergency unit at St. Helier hospital or on the refurbished Hillcross middle school? Is it not more sensible to spend public money—taxpayers' money—on investing in public services such as health and education, rather than on the cost of social failure and rising Government debt, as was done under the Tories?
Mr. Heathcoat-Amory: Yes, of course I agree with the hon. Gentleman. That is where we want to spend the money. I was saying that that will not happen if £3 billion is diverted into a national handover plan for the euro. We do not know the figures because the Government will not disclose them. In written questions, I have asked for the estimated costs of changing over to the euro. The Government say that they have no idea, even in the public sector. So outside estimates have been made by Chantrey Vellacott, an accountancy firm. It has come up with a figure of £36 billion for the economy as a whole. That includes more than £3 billion just for central Government Departments. It said that it was difficult to make an estimate
because of the lack of information we were given from government departments.
That being so, it took a cautious approach.
The Government are committed to something but they do not know what it will cost. Apparently it is not in their estimates—but perhaps it is. We should be told. Either the Chancellor does not believe that it will ever happen so it is not in his estimates or he believes that it will happen and has budgeted a sum for it. If so, where is it?
Mr. Nicholas Soames: Is my right hon. Friend aware, on the important point about the changeover plan, that in France and Germany, where large sums of public money have been spent on the changeover, the Commissioner with responsibility for the euro said the other day that despite these large sums, the effect appeared to be negligible? If a large sum is being spent to no great effect, does my right hon. Friend agree that it should be accountable through the Public Accounts

583
Committee or the Select Committee on the Treasury so that the House may examine with great care how the money is being spent?
Mr. Heathcoat-Amory: I agree with my hon. Friend. If the Government are launched on a project that will cost more than £3 billion just for the public service, according to an estimate, and if they have agreed in principle to undertake that expenditure because they want to join the euro, I think that the House is entitled to scrutinise that estimate and have it explained. All my inquiries have met with responses from the Minister that the Government have no idea and that they have made no calculations. That is the height of irresponsibility, and I agree with my hon. Friend the Member for Mid-Sussex (Mr. Soames).
The Chief Secretary claimed that he had a strategy for productivity in the economy. He wants to make the United Kingdom a global leader. How does he reconcile those words with the news this morning that Veritas, one of the world's largest software companies, has put on hold its investment plans because of doubts about the Government's intentions in the high-tech sector, and particularly about their taxation plans?
The Financial Secretary to the Treasury (Mr. Stephen Timms): I am glad that the right hon. Gentleman has referred to Veritas, which is the fourth largest software company in the world. Will he confirm that, contrary to what he has just said, Veritas is announcing today the creation of more than 2,000 new jobs in the UK, and that it has chosen to locate its European headquarters in the UK? I have the press release in front of me.
Mr. Heathcoat-Amory: That is a predictably misleading version of events. Rather than listen to the Chief Secretary, we can hear from the man who is running the company, Mr. Philip Bousfield, who is a senior vice-president of the worldwide operation. He has said that the company has halved its original investment plans because of uncertainty about the climate for high-tech investment created by inappropriate taxation. That is what the company is saying, which is rather different from the version given to us by the Chief Secretary.
Mr. Timms rose—
Mr. Heathcoat-Amory: The Financial Secretary has had his chance and he has given his version of events. I have given the company's version, and it is rather different.
To return to the comprehensive spending review, the Chancellor said that this review—the second one—would be different. He said that the new resources that he was funding would be tied to results; they would be tied to output and performance. However, we have heard all that before. That is exactly what we were told in July 1998 when he announced a similar degree of extra spending on public services. At that time, he said that the spending would be tied to public service agreements set out in departmental objectives that had to be met. He portentously said:
The Prime Minister has decided that that continuous scrutiny and audit will be overseen by a Cabinet Committee … Money will be released only if Departments keep to their plans.—[Official Report, 14 July 1998; Vol. 316, c. 188]
584
We are entitled to compare that statement with what has happened.
Let us consider one or two examples. In the foreword to the document on public service agreements entitled "Public Services for the Future: Modernisation, Reform, Accountability", the Prime Minister gave one of the objectives as
a reduction in the long-run rate of the growth of crime.
We were told that that would be done
by launching the new evidence based crime reduction programme
with an additional £250 million. It is not a demanding target to cut the rate of growth in crime when the Government inherited a crime rate that was falling, but that is what they have done. They have turned a decrease in the level of crime into the increase that was announced this week.
There is an even bigger mystery about the targets for immigration controls and asylum seekers. That document, which was released in 1998, could not have been clearer. To be fair, it was absolutely specific. The aim was:
To put in place firmer, faster, fairer immigration controls.
More than that, the Government were definite that the time taken to reach decisions about asylum applications would be two months by the Home Office and a further four months maximum by the adjudicator—six months in total.
Two years later, we ask ourselves what has happened to that specific target. Therefore, we turn to the Home Office annual report for 1999–2000 and we find that the objective has completely disappeared. There is no reference to it whatever. On page 46 of the departmental report, all the those targets about
firmer, faster, fairer immigration controls
have become "Target to be developed". On page 47, we are told that
Further work will take place … to develop the integrated planning mechanisms that will ensure that all those with an interest in immigration matters work in a joined up way.
It is a little bit late for that. However, the real point is that a specific target announced by the Government, which would be overseen by a big, new Cabinet Committee and the fact that money would be taken from Departments that failed to meet their targets have been forgotten.
Mr. Loughton: My right hon. Friend is right. Is he aware of ever having seen the minutes of this great new Cabinet Committee that would oversee all the targets and audit all the functions? Is he aware of any Department that has not had its money released because it failed to meet any of the targets that were promised two years ago by the Chancellor? Has any of that happened, or was it all just a load of flannel?
Mr. Heathcoat-Amory: The Cabinet Committee and the new penalties have vanished and all been forgotten. It was all talk. If that happened in 1998, we are entitled to ask whether the same will not happen in 2000 and beyond.
Many other targets were set. For example. Customs and Excise was going to
collect each year the amount of forecast UK revenue yield from indirect taxes.
Has it succeeded in that? Tobacco duty is a good item to consider. It was forecast to raise £8.9 billion in 1999, but the actual amount that Customs raised was £5.7 billion.

585
That is a gap of more than £3 billion between what the Government said that Customs would collect and what it actually collected a year later. That is another target that has vanished. Will the Minister tell us whether any money has been taken away from Customs and Excise and the Treasury as a result?
Mr. Ian Stewart: The right hon. Gentleman referred to vanishing acts, and he will know that the Leader of the Opposition spoke to the conference of the Confederation of British Industry in 1999 and gave a tax guarantee of sorts, which he said was based on a moral argument. We hear that that tax guarantee has all of a sudden vanished, so does that mean that it was based on an immoral argument? What will happen because of the Conservatives' spending cuts, which will mean a loss of £25 million to my constituency? What does the right hon. Gentleman say to my constituents about the removal of that money?
Mr. Heathcoat-Amory: Yes, there is a moral case for low taxation. If one wants to encourage family life and marriage, one should not tax them. If one wants to encourage savings, one should not tax them. That explains the immorality of the Government's actions, so I agree with my right hon. Friend the Leader of the Opposition in setting out the clear moral case for bringing down the burden of taxation over the lifetime of the next Parliament.
Mr. Stewart rose—
Mr. Heathcoat-Amory: I hope that the hon. Gentleman will catch your eye, Mr. Deputy Speaker, so that we can continue this discussion at greater length later in the debate.
Ms Karen Buck: In view of the right hon. Gentleman's remarks about the moral basis of taxation, will he comment on the 22 tax increases that were introduced by the 1992–97 Government? They included slashing the value of the married couples allowance.
Mr. Heathcoat-Amory: The hon. Lady should understand that removing completely the married couples allowance when the Government are running a surplus is wrong and completely contradicts the Prime Minister's oft-repeated claim that he wants the Labour party to be the party of the family and the party that supports marriage. That is the moral argument and the Labour Government cannot duck it.
We are not just interested in the output targets that have all been breached by the Government. We are also interested in the fact that even their spending commitments have been breached. On Tuesday, the Chancellor of the Exchequer made much of the degree to which he wanted to encourage and promote public sector investment. He said that net capital investment would double by 2004—from £7 billion to £18 billion a year. He made exactly the same promise in 1998. Page 17 of the document on the comprehensive spending review forecast that net investment for the following year would be £8.6 billion.
586
Again, we are entitled to ask whether that target was met. Did the Government spend £8.6 billion in 1999–2000? According to the document that they published on Tuesday, the actual investment figure was £2.6 billion. What happened to the other £6 billion? They cannot even predict net investment by the public sector itself one year later. How can they expect us to believe what they say will happen to the economy in four years' time? That is the point. It is a giant exercise in underspin.
Dr. Stephen Ladyman: Will the right hon. Gentleman give way?
Mr. Heathcoat-Amory: I am going to draw my remarks to a close so that the hon. Gentleman and others can contribute to the debate.
The answer to the questions of Labour Members, who have raised the mythical figure of the supposed cut of £16 billion in public expenditure in four years' time, is that Conservative Members will not base our plans for total expenditure on a Labour figure for total expenditure in four years' time because the Chancellor cannot even make accurate predictions for a year ahead for investment by his own Departments. In any case, the entire exercise is vulnerable to what may happen in the economy.
Mr. Andrew Smith: Will the right hon. Gentleman give a straight answer to a straight question? By how much would the Conservative party cut our spending plans?
Mr. Heathcoat-Amory: We have already made the answer to that perfectly clear. We are not going to underestimate expenditure plans drawn four years into the future, when the Government's own expenditure plans, which were drawn up two years ago, have already been found to be false in their output and investment targets. The right hon. Gentleman can build castles in the air and project imaginary cuts years into the future. However, the Opposition are entitled to examine the record and what the Government have so far delivered in office.
It is beyond dispute that the Government have spent their first three years taxing, and they now want to spend in the year before the election. However, the record is against the right hon. Gentleman, and the current spending review will be no more successful than the last one in meeting the public's demands, needs, requirements and aspirations. I agree with the 72 per cent. of the Chancellor's constituents who do not believe the figures either.
Mr. Deputy Speaker: Order. Before I call the next speaker, I remind the House that Madam Speaker has placed a limit of 15 minutes on Back-Bench Members' speeches from now on.
3.21 pm
Mr. Tom Levitt: I understand that my hon. Friend the Member for Tottenham (Mr. Lammy) may try to catch your eye a little later, Mr. Deputy Speaker, to make his maiden speech. We are looking forward to that occasion very much, so I hope that my hon. Friend is successful.
That reminds me of my own maiden speech, which came under the heading of public expenditure. I talked about education to some extent, and perhaps was a little

587
foolish, as I tied myself down very specifically by saying that our party ought to be judged not on big figures and headlines, but on what happens in our localities. I named Chapel-en-le-Frith infants school as a school that, to my mind, would be the touchstone of whether our policies had been successful. That school was overcrowded, had a main road going down the middle of it and 50-year-old temporary classrooms, and was letting in water.
Six weeks after my maiden speech came the announcement that Chapel-en-le-Frith was having its infants school replaced, lock, stock and barrel. Earlier this year, my right hon. Friend the Secretary of State for Education and Employment came to my constituency and opened the new Chapel-en-le-Frith infants school, which means that that touchstone of success has been achieved. However, that was only the beginning as, since then, Tintwistle primary school in my constituency has been completely replaced; Taxal and Fernilee primary school has had a new classroom and an extension; Peak school, Chinley has been remodelled; Whaley Bridge primary school has had one extra classroom and Burbage primary school, two; Newtown primary school in New Mills has had one extra classroom. Throughout my constituency, outdoor toilets, which were to be found in all too many of those schools, have been eradicated.
There have been energy improvements throughout the schools of High Peak. No fewer than 30 schools in my constituency have had new classrooms, extensions to classrooms or other major capital expenditure on classrooms in only three years. Half the schools in my constituency have therefore received genuine benefit from the Government's spending programmes after a 10-year drought in which only a single school building was built in my constituency between 1987 and 1997.
Schools are not alone, as there have been other improvements on the ground that people notice. For example, their libraries are open for longer hours and Derbyshire was successful in getting £2 million of additional funding for rural buses. Our primary care groups are now changing into primary trusts and are much more proactive in their delivery of health care throughout the area. People who, only two years ago, complained to me that their four-year-olds were getting a raw deal now find that nursery or pre-school education is provided for four-year-olds. From September, that will extend to three-year-olds in Derbyshire, and is another major achievement that people can see on their doorsteps, in their streets and in their schools.
In High Peak, youth unemployment has been reduced by 78 per cent., and there are now few people who qualify for the new deal. That means not that the new deal is not affecting enough people, but that it has been so effective, as have general plans for generating jobs, that it is hardly being used. In the past three years, unemployment as a whole in my constituency has halved as a result of economic conditions created by the Government. In the next two years, there will be 101 more police officers in Derbyshire. I am sorry, that figure was correct until yesterday but, with further funding not just for 5,000 police officers, but an additional 4,000 throughout the country, we will get a share of that. Those are the real issues on which real people are demanding to see action, and our public spending policies are delivering them.
Those issues are genuine, in contrast to some of the absurd fantasies that we have just heard from the right hon. Member for Wells (Mr. Heathcoat-Amory), who
588
does not seem to live in the real world or relate to the typical experiences of his constituents. The right hon. Gentleman made no mention of the four-year-olds whose education is now being paid for, or of the class size problem. We had a class size problem in Derbyshire, as 13,000 children in key stage 1 in our infant schools were in classes of more than 30 in 1997. We are on target to eradicate that class size problem in just a few weeks, which is long overdue and will be another achievement.
If I may, I should like to put down some markers for the future. If I were to make my maiden speech today, I might like to use as a touchstone the Buxton to Matlock railway line and the need to restore it. The Tintwistle-Mottram bypass is a good contender for funding. Elderly people in my constituency are looking forward very much to next week's announcement on funding for long-term care. Again, we have looked at that matter long and hard and I believe that, at last, next week, there will be an announcement of which I can be proud.
I should like my right hon. and hon. Friends to look at Derbyshire's position in the local authorities' league of spending. We have been down at the bottom for quite a long time, and we are still there, although the difference between top and bottom is not what it was. Derbyshire has had generous settlements for local funding in recent years which, while not quite generous enough to get us up the league table, mean that we are not as far from the top in cash terms as we used to be.
I am proud of the Government's record of public expenditure and know that, in years to come, I shall be proud of the delivery of what my right hon. Friend the Chancellor announced earlier this week. In complete contrast to our position is the play on words or joke that the shadow Chancellor was trying to make in his pathetic response to Tuesday's announcement. He was trying to make a joke of the idea that in our manifesto we said that we should not be judged on public expenditure alone. That is quite right, because if were to say merely that we believe in more public expenditure on the principle that more must be better, our hero would be the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who saw social security expenditure go through the roof when he was in charge of the Department of Social Security.
The right hon. Gentleman spent more than any other Secretary of State for Social Security before him not because he was enjoying the fruits of success, but because he was paying the price of failure. He was paying the price of bailing people out of poverty and of giving benefit to the many people who were unemployed. We believe in public expenditure because it has a positive purpose; it is not just for providing safety nets and bailing people out of problems, which often are not of their making, but for building a coherent society. We have done that and will continue to do it because we have got the economy right, and we have the wherewithal and the determination to do it.
Because we have more people in work, we have more people paying tax. Because more people are earning more, they are paying more tax. There are now more people paying the higher rates of taxation, which could explain some of the barmy figures that we were hearing earlier. They are paying those rates because they are earning more, and they are higher up the income scale. I have no regrets at all about such an increase in the tax take.

589
We have done more: we have reduced the cost of debt to the Government and to householders throughout the country. One has only to consider mortgage rates to see what we have done to stabilise and rationalise our economy. We have a stable, low rate of inflation, and everybody, including companies coming into this country to invest and people planning their family's future, knows that it will continue to be stable for a long time. During the period of these long-term spending plans, there is no reason to believe that we shall have significant problems with the economy getting out of control.
Six basic principles should guide public expenditure. There may be more; I may have missed some out. First, we should get best value for the money that we put in. We should not only measure that in cash terms, but look at the qualitative responses that we get from investing money in services. The second principle is the measurement of outputs. It is essential that we are able to measure what public funding does so that we can assess whether we are getting best value.
Thirdly, we must not be afraid to make difficult decisions about priorities. We had a difficult period in our first two years when we were tied to the spending plans that we had inherited, and with those difficult decisions we got a taste of how bad it would be if we had to return to that situation. Fourthly, our spending decisions must be sustainable; they must not be a flash in the pan. We must not throw money at a problem, thinking that this will solve it. We must build on what has happened before and make sure that we can deliver in future.
Fifthly, our spending plans must be without dogma. By that I mean that the era of Labour Members saying that all public spending is good and all private spending is bad has passed. We must consider using partnerships and seedcorn investment. We must consider using any available money. There is enough capital flying about in this country which has no home to go to. We should find a good home for private capital and use it to underpin public services. I have no conscience about using private money or any money from a legal source to give a good foundation to our public services.
The last principle, which the right hon. Member for Wells completely missed the point of, is that we must plan for the long term. He said that the Government claim to have put money into the national health service, but asked where were the results. If he can find a way of training nurses in 12 months, of training doctors in 18 months and of building hospitals in six months, let him tell us, because our investment in nurse training, doctor training and the capital programme in the health service cannot deliver overnight. We do not claim that it will do so, but we say that essential, long-term, planned investment meets the principles that I have outlined.
Dr. Jenny Tonge: I accept the hon. Gentleman's point about the length of time that it takes to train a nurse or doctor, but is that not more reason why the Government should have put more money into the health service at the beginning, and not stuck to Conservative spending plans?
Mr. Levitt: I find it odd that someone who is committed to a 1p rise in income tax to invest in
590
education, health, transport and everything else says that we should have found more money. That money has been provided, and it has been invested in a sustainable way.
Those of my hon. Friends who know me best know that sycophancy is not something that I adhere to. I am a scientist by training and I like to look at issues objectively. I have looked very hard at the Government's spending commitments in the two days since they were published and I can sum them up in one word—brilliant.
3.35 pm
Mr. Matthew Taylor: I am impressed that 30 schools in the constituency of the hon. Member for High Peak (Mr. Levitt) have new buildings. I shall reflect on the benefits of his seat being a marginal Labour gain at the last election. The picture has not been the same in my patch. I have been in touch with head teachers in Cornwall, and the great majority have had to cut staff since the election.
I want to examine how, on the one hand, the Government talk about huge increases in public expenditure and, on the other, the experience over the past three years is of teacher losses, growing class sizes, longer waiting lists and cancelled appointments—problems that led some Labour Members to resign ministerial posts and complain that the Government were out of touch. Even the Prime Minister has complained that he is losing popularity. That is because in the early years of the Parliament, the Government did not follow a progressive agenda of sustainable investment in public service; they followed a Conservative Budget plan that even the last Conservative Chancellor described as eye-wateringly tight. We know that even he would not have followed that plan in practice because the annual expenditure reviews at the time would have released more funds.
Expenditure on public services as a proportion of national wealth started high and followed a smooth curve over the past few years, ending up where it started. It is like the grin of a Cheshire cat; there is nothing to support it. That is why the Government are in great difficulty, and there is a difference between what they have said they will do about expenditure and people's experience on the ground.
That is an election headache for Labour Members, because even the funds that have been announced will take expenditure, as a proportion of national wealth, only back to the level that they inherited from the right hon. Member for Huntingdon (Mr. Major). For the most part, that expenditure will not take effect in time for an election. It is noticeable that the Government's announcements seem to wipe the slate clean of the £19 billion for education and £22 billion for the health service that we heard about two years ago, at the time of the last comprehensive spending review. That is hardly surprising because that money was never there, and it certainly has not been delivered.
Dr. Ladyman: Before the hon. Gentleman hits the moral high ground, I point out that my hon. Friend the Member for High Peak (Mr. Levitt) misled the House: the Liberal Democrat manifesto did not promise 1p on income tax for health spending; it promised £350 million for health spending from a change in national insurance

591
contributions. How many hospitals in Cornwall would that money have built if it had had to be spread over the whole country?
Mr. Taylor: We also promised a steady 2 per cent. real increase in health spending thereafter, which the Government have not delivered. The key difference between what Labour has delivered and the Liberal Democrat manifesto is that we would have guaranteed upfront investment at the beginning of the Parliament, and not waited for later economic growth. We did not calculate in economic growth. We guaranteed immediate extra expenditure on health and education and for pensioners and others. That upfront expenditure is the gap between Labour's credibility and what it is saying about public expenditure.
Just look at the figures. In the first period of this Parliament, from 1996–97 to 1999–2000, there was a fall of almost 3 per cent.—2.9 per cent.—in the proportion of GDP being invested in public services, and the increase that has just been announced for the next year will be only 1.3 per cent. of GDP. In other words, at the time of the next general election, it will be lower than when the Government came to office.
Those figures hold even when social security is excluded. The Government make great play of the fall in unemployment allowing them to release extra expenditure, but if social security spending is excluded, the fall in proportion of GDP was 29.1 per cent. to 27.1 per cent., now rising in 2001–02, the probable general election year, to just 28.2 per cent.
The net result is that over this Parliament, public sector spending will grow over the first four years to the general election by 1.1 per cent. in real terms per year. That is worse than under John Major or even Baroness Thatcher. The growth announced in the Chancellor's new comprehensive spending review is real growth, but it comes on the back of an unprecedented squeeze in public service. That is at the root of the problem that the Labour party faces. Even on the new plans, current spending growing at only 2.5 per cent. a year is less than for most of the period under the Conservatives.
The Government like to say that the rate will be 3.5 per cent., but a large chunk of that is the increase in capital investment. That is a problem for the Government, but it is an even bigger problem for those on the Conservative Front Bench. At least the Government are now speaking of a real, sustained increase in public expenditure. Those on the Conservative Front Bench must explain how they will come up with £16 billion of cuts in public services, when we are currently spending less than the previous Prime Minister spent as a proportion of national wealth, and less than Baroness Thatcher spent as a proportion of national wealth when she was Prime Minister. If Baroness Thatcher could not do it, is the present leader of the Conservative party capable of delivering it?
On public sector net investment, the Government are trumpeting large increases in capital investment, but the problem for them is that in 1999–2000, public sector net investment is the lowest proportion of GDP since figures started. I have been looking through the figures, which go back on a roughly comparable basis as far as 1963–64, and none have been lower than the Government are currently delivering. On average, under the Government,
592
it will be 0.6 per cent. of GDP, compared to 1.5 per cent. under John Major, a drop of 60 per cent. in capital investment, and in no year—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. As the hon. Gentleman has made the slip twice, may I remind him how he must refer to another hon. Member?
Mr. Taylor: I apologise, Mr. Deputy Speaker. I should do better.
The drop of 60 per cent. in capital investment will be reversed. The Chancellor has trumpeted that, but even in 2003–04, we will not reach the level of public sector net investment achieved in 1992–93, and by the end of this Parliament it will only just exceed the level when the Conservatives left office, with a huge fall in between.
It is true that debt has been substantially reduced. Pensioners were given a miserly 75p increase in March, yet a £2.5 billion surplus in social security funds was used not to increase that miserly pension rise, but to pay off national debt. They must wonder why a pension, which is among the lowest in the developed world, is not to go up, whereas we are to continue paying off debt that is the lowest of any G7 country. It seems an odd priority for a progressive Government, and I suspect that hon. Members will find over the next few months that pensioners are extremely angry about the fact that they got nothing from the distribution of the benefits of growth, which the Labour manifesto promised they would share.
In 1997 Labour decided for electoral reasons to adopt a Conservative Budget plan for two years or more—an electoral decision which proved unnecessary. I do not believe that the Labour party was right to think that it could not win seats without doing that. Indeed, Liberal Democrat gains show that they were wrong to take that view. Nevertheless, Labour decided to deliver a Conservative Budget. The Conservatives were out of office, but the Conservative Budget plans were still in government. The results have been appalling for pupils, patients, parents, and public services as a whole.
On crime, the Conservatives promised 1,000 extra officers in their 1992 manifesto, and 5,000 in 1995. In reality they delivered a reduction, and the Labour Government have continued to oversee reductions. A pledge of 5,000 extra officers has translated into almost 2,500 fewer since the general election. No wonder crime is rising.
Mr. Casale: I am grateful to the hon. Gentleman for giving way. Does he share my amazement, and that of my hon. Friends, at the speech of the right hon. Member for Wells (Mr. Heathcoat-Amory) who, speaking for the Opposition two days after the announcement of £43 billion extra for the public services, hardly mentioned health and did not mention education at all? Will the hon. Gentleman take the opportunity of going on the record and welcoming those public service increases?
Mr. Taylor: I am already on record as welcoming an increase that is overdue and insufficient, but at least it is happening. I agree entirely about the right hon. Member for Wells (Mr. Heathcoat-Amory), who read out a letter from a constituent in Wells who said that she did not plan to vote Labour at the next general election, but did not mention how she would vote. Given that it is a marginal

593
seat between the Liberal Democrats and the Conservatives which I believe we will gain at the next general election, perhaps there are good tactical reasons for moving from the Labour party to the Liberal Democrats.
Mr. Heathcoat-Amory: The hon. Gentleman is muddling up two letters. One that I read was from the ex-Labour supporter in Merseyside who did not intend to vote Labour. The one that I read from my constituent in Glastonbury did not say which way she would vote or has voted in the past. It is an impertinence on the part of the hon. Gentleman to probe her political allegiances, rather than address the substance of the issue and the complaint that she was making against the Government.
Mr. Taylor: Given that the right hon. Gentleman has been reading out letters from correspondents about their political allegiances, I am not entirely sure that the impertinence is mine. I am not sure that his correspondents expected their voting preferences to be read out in the Chamber, but that is a matter for him to consider.
On education, the Conservatives say that they would spend less, so presumably the situation will be worse still. Even between 1991 and 1996 when they spent more than the present Government, the number of pupils in primary schools in England in classes of more than 30 children rose by 38 per cent.—a third of all primary pupils in England were taught in classes of more than 30.
Under Labour, although class sizes have been reduced for five to seven-year-olds, they are up for eight to 11-year-olds and at record levels for secondary school classes. Teacher shortages are worsening. There are 47 per cent. more vacancies than in 1997. In the last comprehensive spending review, the claimed £19 billion or 5.1 per cent. increase for education every year was in fact only 2.5 per cent. last year. The Government cannot even deliver the spending increases that they like to announce, so we must have some doubts about the new comprehensive spending review.
The issue for both parties is to explain away the fact that things were bad under the Conservatives and got worse under Labour, and now the Conservatives want to cut another £16 billion. At least Labour acknowledges its mistakes.
With regard to health, the picture is the same. Under the Conservatives, spending was greater than they now say they would spend, but there was a 41 per cent. reduction in beds, a 53 per cent. rise in waiting lists, and 20 per cent. of intensive care beds were lost between 1989 and 1996. Bureaucracy increased: 20,000 more managers 50,000 fewer nurses, and more than 50,000 people a year had their operation cancelled, but the Conservatives want to spend even less.
The Labour Government tried to spend less, with the result that the number of out-patients rose from 248,000 to 496,000. Their manifesto stated that they would save £100 million in red tape; they failed to do that, and the number of managers has increased while the number of beds has fallen by more than 5,000.
This is deceit, and it is hard for the electorate to discern what is really happening in public expenditure. The first deceit is the Government's refusal to acknowledge that
594
they have cut the proportion of national wealth that is spent on public services. That is the reason for the problems of health, education and crime. The Government have stored up money and they are now able to announce big increases for the general election. However, those increases will not take us beyond the level that they inherited. That is also a problem for the Conservatives, and the reason for their bad performance in every interview on Tuesday.
If there are no big increases in public expenditure, which does not exceed the proportion of national income that was spent under the previous Prime Minister or even Baroness Thatcher, how can the Conservative party provide cuts of £16 billion in schools, hospitals, police forces and on pensioners, who are still struggling to survive?
Labour's policy is an election year bribe. It was always intended that expenditure would fall in the early years to allow an increase later. The cost has been borne by the people. The Government claim that they have turned round the management of the economy, that the economy is now about sustainable and that we should consider the increases. In eight Departments, the biggest increase in spending happened this year, in the run-up to an election. Ten more Departments will receive their biggest increase in 2001–02, election year. Only one Department will receive an increase of equivalent size after the general election. Five Departments get an increase only in general election year. That is not a policy of sustainable increases but a strategy that was designed to win the last election by adopting the Conservative budget to head off criticism, and to win the next election by pretending to spend substantially more when spending remains at the same level as when the Government were elected.
Spending on education and health is welcome, but the Government should not be allowed to get away with the fact that it is at the expense of longer waiting lists, larger class sizes, cuts in the number of policemen and the measly 75p increase in pensions over the past three years.
3.52 pm
Mr. David Lammy: It is with great pleasure that I rise to make my maiden speech. It would be remiss of me not to note, in passing, that I am almost certainly the last Member of Parliament to be elected to the House while Madam Speaker graces the Chair. As someone from a generation that grew up with Parliament being televised, I can safely say that Madam Speaker is truly a celebrity and that she will be missed.
I stand here with great humility as the newly elected representative of the people of Tottenham. Hon. Members know that I stand here only because of the sad and sudden death of Bernie Grant. I would dearly have loved to spend my first years in this place working alongside Bernie. Fate determined that that was not to be. I thank the people of Tottenham for their confidence in me, and I hope that I shall repay it in the years ahead.
Bernie made his maiden speech in July 1987 and demonstrated at once both his local knowledge and his confidence as a politician. He was a natural. He was authentic and brutally honest and, as has been said,
He walked a tightrope between street heroism and government office.
For us in Tottenham, he was exceptional and a first-class constituency Member of Parliament. You will understand, Mr. Deputy Speaker, when I say that you could not really

595
describe yourself as a friend of Bernie's until he had had occasion to bark at you. I am delighted that, on the last occasion I saw Bernie, he did just that while lamenting my stance on the vexed issue of Mr. Mike Tyson's entry to this country. Bernie argued passionately against his entry and considered Mr. Tyson an unworthy role model for his young constituents. His concern for young people is well documented and remained a passion throughout his life.
In his maiden speech in 1987, Bernie said:
unless the political system can offer some prospects, particularly to our young people and our young black people, they will find other means of expressing their frustration.—[Official Report, 6 July 1987; Vol. 119, c. 97.]
He was referring to the Broadwater Farm estate and the disturbances that had happened there. He went on to talk about the way in which the local community and the local council had worked together after that to harness energies and regenerate the estate.
Bernie worked closely with his wife, Sharon, who was very much his partner in work as well as in life. I would like to thank Sharon for all her work on behalf of the people of Tottenham. For her and all of us, Bernie's legacy will live on. He is with us today in the memory of all who knew him. I know that he would forgive me for not wearing a dashiki today in his honour. In a very real sense, he is part of the reason I am here. I thank him for that, and I shall never forget him.
Tottenham is a constituency that has been well served by its Members of Parliament. Before Bernie, Norman Atkinson was our Member of Parliament for 20 years and he, too, concerned himself with the needs of the community and local government. He was also treasurer of Labour's national executive committee for five years. Before Norman Atkinson, Mr. Brown was elected as Tottenham's Labour Member of Parliament in 1959, but in 1962 he crossed the Floor and fought the 1964 election as the incumbent Tory Member of Parliament for Tottenham. It was said at the time that, by crossing the Floor, he raised the average IQ of both the party he left and the party he joined. You will agree, Mr. Deputy Speaker, that I follow in varied and interesting footsteps. However, I can assure you that I will not follow Mr. Brown's example.
I am glad to represent Tottenham, and not only because it is my home and the birthplace of the best football club in London. I am proud because in Tottenham, we have a grassroots intellectual tradition which has been nurtured on the margins of society. Although the margins of society have provided some of the worst statistics on social exclusion, they can also shed the most radical and exciting perspective on social thought. Although Tottenham is a constituency of much poverty, it has never been impoverished in its people. Through the centuries, many cultures of the world have traversed Tottenham High road—white English people, Russians, Huguenots, Spaniards, Greek and Turkish Cypriots, Africans, Irish, Hasidic Jews, Asians, Caribbean islanders and, more recently, Kosovans and other people from eastern Europe.
There is no need to go to New York or California to experience dynamic diversity and vibrancy. One need not look only to the Commonwealth for a model of communities coming together. Under our own eyes, people from the far reaches of the world are living happily together, from different backgrounds, races and religions.
596
All contribute to the richness of Tottenham. All understand the importance of unity and working and living together. All celebrate and glory in the multi-faith, multicultural family that constitutes Tottenham. These people are a valuable resource. If that resource were an untapped oilfield or a new diamond mine, business would be queueing round the block to buy the rights. People are the best and most precious resource that we have. I am acutely aware that I am here today because, at every stage of my development, people have invested in me.
I have had the support of a dedicated mother and family, Haringey council, Haringey teachers, my church, my secondary school, the Labour party, mentors in the legal profession and lecturers at the university of London and Harvard law school. I have even had the support of my bank. No one said, "This isn't for you. Who do you think you are? Black men from Tottenham don't go to Harvard law school." People believed in me. They invested in me. Constituents such as mine want and deserve that same investment—investment in people and the funds and resources not just to take up employment, but to become self-employed by opening small businesses, dot.com enterprises, cafés and newsagents. They want to play football at White Hart Lane, play music in a band or create art. We must invest in people's souls as well as their skills.
It is an honour to make my maiden speech on the most crucial subject of public expenditure, because Government expenditure over the years has neglected to take into account some of the grave problems of the inner city, perhaps in the hope that poverty might disappear by itself. For too long, the state has said to too many people in Tottenham, "You've got nothing to offer. You must be stupid because of your background, because you don't speak English. What are you doing living here?"
The task ahead of us is to continue to search, in partnership with the community and the Government, for new forms of response to an ever-complex and changing world. For the general welfare, sound investment for business and for people is not best served by placing even the least political restraints on economic activity. Responsible government must work to secure social and economic justice. Perhaps that is a tightrope that we knew we would find ourselves walking, but it is one that the Government have trod remarkably well. We have a Government who recognise that public expenditure can liberate and nurture as well as simply provide public services.
Just over a month ago, the Government announced a £50 million package of investment through the new deal for communities programme for the Seven Sisters area of my constituency. That is more than just a band-aid; it is real money—£50 million of investment in the 10,000 people in the Seven Sisters area of Tottenham, which is plagued by poor housing, high crime and weak schools. On Tuesday, my right hon. Friend the Chancellor of the Exchequer announced the Government's massive nationwide investment in public services. His announcement means at least £50,000 for every secondary school in Tottenham every year for the next three years—all paid to the head teacher and all money to be invested in books, new information technology equipment and helping children to grow and develop.
There are 29 centres of early years excellence across Britain. Three are in Tottenham, which is the highest concentration in the country. We can provide an early

597
years programme for almost all three and four-year-olds whose parents request a place. No four-year-olds in Tottenham will be of the opinion that they are stupid because of their race or because they do not speak English. They will look forward to studying in higher education establishments such as the university of Middlesex, which this week announced that it is to open a new site for 10,000 students in the heart of the regeneration zone in the centre of Tottenham.
The college of North East London has just undergone more than £19 million of development. That money will refurbish the buildings and install cutting-edge technology so that people in my community can learn directly. Tottenham is also the home of the Digital Arts centre, which offers state-of-the-art technology and facilities to a community that wants to engage in music and film. We have many artists in Tottenham, although not ones whose exhibits can be found in Tate Modern or the national gallery—at least not yet. There are plans afoot to bring more art and technology to Tottenham, because our young people and entrepreneurs are crying out for them.
The new deal has created opportunities for 139,000 young people across Britain to gain employment. The scheme has been effective in helping young people and the long-term unemployed to get real jobs, but Tottenham needs more. Our unemployment rate of 11.6 per cent. is the third highest in England and the new deal has not met the needs of all black youth in Haringey. It is vital that that flaw be swiftly addressed. I welcome the Government's assurances that that aspect of the new deal will be quickly improved.
I have the great privilege to represent the most multicultural constituency represented in the House. I am not just a black politician for black people; I am a politician for all people. Multi-ethnic means just that—all ethnic groups, black and white. When I see any section of my community disadvantaged or missing out on life's chances and opportunities, I will strive to support and speak out for it. That is what my constituents would expect me to do.
As a young representative, I am very aware of the lack of interest in the workings of Parliament among my friends and contemporaries. Recent elections have shown a certain lack of engagement between voters and politicians. Most worrying is the fact that younger people—those under 30—are particularly uninterested. They still engage in single-issue politics, but less so in national party politics. This year, I have fought the Greater London Assembly election and the Tottenham by-election. In both, the candidates promised to find solutions to real problems. That is what the voters demand and politicians strive to deliver. Why, then, does a persistent apathy creep in?
That apathy dictates that the politician's role is to fail and the elector's role is to be disillusioned. At the end of the cycle, the politicians are frustrated, the media cynical and the electorate turned off. For me, the real work begins now. Along with all Members of the House, I shall try to find ways to make new connections and to join an on-going dialogue with the electorate. Many people have invested in me. I look forward—with the Government and my right hon. and hon. Friends—to investing in the people of Tottenham. I thank the House for welcoming its youngest Member.
4.7 pm
Mr. Michael Fallon: It is a pleasure to be the first to congratulate the hon. Member for Tottenham (Mr. Lammy) on one of the finest maiden speeches that I have ever heard. He paid the most moving tribute to his late predecessor and followed that with the most eloquent advocacy of the need to invest in his constituents. He made a beautifully judged speech and described Bernie Grant as positioned between street heroism and Government office. I see that the hon. Gentleman has selected a place halfway between the very Back Bench and the Front Bench, so he is well poised between Back-Bench heroism and Front-Bench office. I am sure that it will not be long before he moves further forward and I hope that it will not be long before the House hears from him again.
The comprehensive spending review needs to be set in its context. The first CSR was only two years ago, but already we hear that the third is pencilled in for 2002. Instead of being a three-yearly review as originally promised, the CSR has already become two-yearly as the third year of each seems to be subsumed by the first year of the next. It is perhaps important for the House to recall that the first spending review did not even last two years. It was announced in 1998 and began in April 1999, but it collapsed that first Christmas as the flu crisis hit the national health service and the Prime Minister panicked on the David Frost show.
Within a year of the first CSR, the Government were rushing emergency funds to the health service and emergency cheques to our schools. When we assess the first CSR review, we look in our constituencies for signs of delivery. Three years into this Government, Kent has no additional police officers, longer health service waiting lists now and no new hospitals in west Kent. My hon. Friend the Member for Tunbridge Wells (Mr. Norman) and I have campaigned for the dualling of the A21, but that has still not been done. My constituents have paid all the extra taxes and heard all the promises but, three years on, the Government have still not delivered.
Perhaps one merit of the second CSR is that it has acknowledged the extent to which the first CSR was ill judged. We have now had sudden large increases in health, schools and transport spending. That in itself does not help planning by Departments. The evidence of the first spending review shows how much underspending there has been as a result of departmental expenditure limits. That kind of lurching—stop and go—has not allowed the long-term investment that everyone wants in the public services. That is especially true of schools and hospitals.
Conservative Members want better public spending. That means more public spending front line and public spending that gets through faster. Let me deal first with the public service agreements that were supposed to underpin the first CSR. Originally, there were 600 targets. Within a year, 400 of those had been scrapped and we were down to 200. I now see from the document presented on Tuesday that we are down to what are called "key" targets. Perhaps when he winds up the debate, the Minister can tell us just how many targets are still in operation—or have we gone from 600 to 200, to just one, in order to regain some popularity in time for the next general election?

599
If those public service targets are to be taken seriously, we need serious measures of outcome that are openly understood by our constituents and can be properly audited. It is one of the greatest weaknesses of the present targets that they are self-audited—that the Treasury alone says whether they have been met. The Government have got into trouble, through over-counting and over-promising with vague targets, because the electorate cannot understand what is being delivered, when and where. That disillusion is setting in.
Secondly, we must ensure that the money gets through faster. When the Chancellor announced in March the emergency package of sending some school money direct to schools, I cheered. That is what we were trying to do with grant-maintained schools. The CSR announced on Tuesday refers to direct grants. We applaud those. The amount of money is minuscule.
Mr. Andrew Smith indicated dissent.
Mr. Fallon: I do not know what happened in the Chief Secretary's constituency, but in mine it took seven weeks to get those small cheques through to primary schools. Interestingly, those cheques were still routed through the LEA. We are still waiting for that money.
As a further example, let me quote a letter that my local education authority has written to its schools about the devolved formula capital budget for 2000–01. It said:
We have now had confirmation that the DfEE will be paying the money to the LEA on the following basis: 22 per cent. of the annual entitlement in June
—that has not yet been received, by the way—
22 per cent. in September; 22 per cent. in December; and the balance at the end of the financial year.
That is, 12 months on. The letter goes on:
Clearly this phase method will be unhelpful to many schools who wish to carry out work over the summer and who do not have sufficient reserves to cover the possible cash flow implication.
If it is now common ground that we should go round the LEAs and get the money straight into the hands of head teachers, let us try to work out a faster way of doing it. I asked the Chancellor on Tuesday whether, if it was right to send every secondary school £70,000 direct, the whole lot should be sent direct. His answer was interesting. He said that the LEA would have to deal with special educational needs and school transport. I certainly agree on the first—special educational needs money could not be allocated by school; some kind of social services or education authority function must be at the centre to do that—but I do not particularly agree on school transport. What was interesting about the Chancellor's reply, however, was that he did not resile from sending the rest of the money direct to schools. That is good news, because it is our policy. It is called free schools: take the school budget and give it to the schools. We did that with grant-maintained schools and the Chancellor is just cottoning on. I hope that he will get on and do it with the rest.
Otherwise, we are waiting. Our schools are waiting for the money that has been promised, but is still to get through to governors and head teachers. West Kent is still waiting for the transport expenditure. We have been paying extra motoring taxes and more for petrol, but our new trains have not arrived and our buses are no better.
600
For three years we have been paying more and getting less. Worst of all, we have been waiting for a better health service.
NHS waiting times have gone up. For three years, we have been campaigning for a replacement for our two hospitals: the Kent and Sussex hospital in Tunbridge Wells and the Pembury hospital on the edge of Tunbridge Wells, both of which serve the Sevenoaks constituency. The case went not to the previous Government, but to this Government in the summer of 1997. It was turned down. It went to this Government again in 1999, but it was turned down. We are still waiting for the Government to get the extra health spending through to our constituents. Until they start to do that and to deliver on the ground, they will have no credibility.
Mrs. McDowall from the village of Otford has given me permission to quote a letter sent to her from the Maidstone and Tunbridge Wells NHS Trust. It is dated 10 July, so it is fairly topical. It says:
We have received an x-ray request
from your doctor
for you to attend for a routine MRI scan.
At the date of this letter there is a waiting time of approximately 26 weeks for this examination.
That is a routine, but necessary scan. Why is Mrs. McDowall waiting for 26 weeks to have a routine scan? She will have heard about all the extra billions; she heard about them when the first CSR was announced two years ago in 1998 and I am sure that she heard about them again on Tuesday. The money is not getting through. People in west Kent are waiting for money to get through faster to our schools, our public transport and our national health service. We are waiting for the Government to deliver.
There will be a limit to people's patience, as the Chief Secretary can see from Labour's falling position in the opinion polls. In the end, the people of west Kent and Sevenoaks will be waiting not just for more money for schools and the NHS; they will be waiting for the return of a common-sense Conservative Government.
4.20 pm
Mr. Stephen Hepburn: I should like to touch on two specific areas of public expenditure that are of great importance to my constituents. First, I want to raise the issue of health spending, because recent figures show alarming discrepancies between my constituency and those in other parts of the country. Secondly, I shall talk about defence spending and its role in the key industries in my constituency, and its effect on the major issue of job creation, which leads on from that.
The Chancellor's statement was first class. There is no doubt that it was good news for the area that I represent, and for the north as a whole. The increase in Government spending will be welcomed by my constituents, but I should like to draw the House's attention to some other figures that were not given such a high profile as the Chancellor's statement—the annual performance figures for the NHS that were announced last week.
It is five decades since the Labour Government established the NHS, yet there has never been sufficient accountability for the quality of treatment that the health service provides to the public. The statistics were an illuminating source of information. We must be careful when using statistics, as it has been said that they are often

601
used as a drunk uses a street lamp—more for support than illumination. However, the new NHS indicators cast a clearer light on the variations in performance across the NHS.
The shocking fact about the performance indicators for my constituency is that on most indices we are near the bottom, or bottom, of the league table. We are the third worst for the number of doctors per head of population. Obviously, if we do not have enough doctors, people's health will be worse. We are the third worst for the number of people dying from cancer, and we have one of the highest death rates in the country. Those figures are not a reflection on the staff of my local health authority, because the same performance indices show that they are among the best performers in the country. They have been swimming against a historic tide of staff shortages, lack of resources and a local population whose health has traditionally been among the worst in the country because of the concentration of heavy industry and the prevalence of deprivation.
I am sure that we all agree that health inequalities are immoral and unacceptable. I am pleased that the Government have announced that the abolition of those anomalies for ever is a priority. They cannot be abolished quickly enough, because my constituents are twice as likely to die as a person in a constituency in the south of England.
The Government have adopted a two-tier approach to abolishing inequalities—first, by giving greater resources to health authorities in more deprived areas to allow them to narrow the inequalities between them and other authorities. The investment announced this week will pay for the extra doctors and nurses that are needed, and to improve the equipment that, sadly, has been neglected for 20 years.
The second tier is tackling deprivation, which is one of the major of causes ill health, and that means tackling unemployment head on. The new deal has certainly had an impact in Jarrow. Already, youth unemployment is down by 78 per cent., and long-term unemployment is down by 62 per cent. On top of that, raising incomes in the constituency through the minimum wage, the working families tax credit and child benefit brings people out of the terrible spiral of deprivation that they have faced for so long.
I shall now refer to defence expenditure. The mainstay of the local economy in Jarrow is shipbuilding—it has been in the past, is now and I hope will be in the future. The shocking fact is that the average age of the skilled worker on the Tyne is now 50. Urgent investment in skills is required if we are to retain a shipbuilding presence on the Tyne.
We are currently awaiting an announcement from the Ministry of Defence about where the roll on/roll off ferries will be built. I appeal to Ministers to make an early announcement, and end the misery of the workers who want to know whether they will have a job or not. I also appeal to Ministers to give preference to the first-class Maersk bid, which unselfishly—I stress the word "unselfishly"—splits the work between the work force of Cammell Laird in Liverpool and the rest of Merseyside, and the work force in Tyneside. They have come up with a solution involving workers from across the country with similar problems who are not currently using their skills.
602
I do not underestimate the importance of that order for my constituency. It involves significant defence expenditure. A positive announcement would provide employment for about 1,500 new workers in my constituency and up and down the Tyne. It would provide new apprenticeships to replenish depleted skills. The wages alone would inject about £650,000 into the local economy, not to mention the knock-on effect of a further 1,500 jobs or more in the local economy through support for local businesses.
I shall end on that note. I hope that Ministers take on board the issues that I have raised about health inequalities and the lack of shipbuilding orders on the Tyne. The Chancellor is taking positive action by providing increased expenditure, and the Secretary of State for Health is taking positive action on health. In my area and in Tyneside as a whole, we also need positive action to ensure that our industrial base—and shipbuilding in particular—has a future.
4.26 pm
Mr. John Wilkinson: We have heard two speeches of outstanding quality. I was much moved by the contribution of the hon. Member for Tottenham (Mr. Lammy). He said of Bernie Grant that he was natural, authentic and brutally honest. I am sure that the hon. Gentleman shares those qualities with his predecessor. He spoke about there being no need to go to New York or California to discover a myriad of diverse vibrancies, and I am sure that many a Select Committee could bear that advice in mind before deciding on its travel programme.
Some people say that there is no gratitude in politics, but the hon. Gentleman showed the opposite. I was especially touched by the warm tribute that he paid to his mother, his family, his teachers, his friends, those in his political party and those who had brought him to where he is now. I am sure that he will fulfil a distinguished role as the hon. Member for Tottenham.
The other remarkable speech, which followed a series of remarkable speeches, was that of my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). It was full of rigour and intellectual honesty, and to the point. It was the culmination of a series of distinguished speeches that he has made on the Finance Bill, the last of which I heard on Third Reading last night. Each one has been of the highest quality. I wish that more right hon. and hon. Members had been present to hear him.
As my right hon. Friend warned us, the public expenditure statement has all the ingredients of an inflationary package. It is almost certain to increase interest rates, as the Monetary Policy Committee of the Bank of England has warned us. The likelihood is that in the medium to longer term, it will cause taxation to rise as well. The interesting thing is that the projected figures for the last part of the triennial period show that there will no longer be a budgetary surplus, and by then the deficit will have to be made up with taxation.
I am sure that the Government do not want to talk about that additional burden of taxation now. When the Lex column in yesterday's Financial Times spoke of "Pumping for a purpose" in connection with the public expenditure statement, it defined it in entirely correct terms. The Government are pumping the economy for the purpose of winning the next general election. It is an

603
irresponsible additional injection of public money into the economy at a time in the cycle when there are inflationary pressures and pressures on capacity. I am sure that the Monetary Policy Committee is wise to warn of the dangers.
Mr. Alan W. Williams: This is the second or third time this afternoon that we have heard that the Government are pumping the economy for the general election. Does the hon. Gentleman accept that the programme starts on 1 April 2001 and continues for the three subsequent years, and all the guessing suggests that the election could be on 1 May next year? So it is a post-election package rather than a pre-election package.
Mr. Wilkinson: I do not think that it will help the Government, whenever the election comes. The electorate will not be taken in by what constitutes an extra £100 billion of public spending being put into the economy over the period from last year until the financial year 2003–04. The electorate will judge the Government on their performance.
I can only quote the experiences in Ruislip-Northwood, and they are dire. Only last Thursday, consultation started on the closure of Harefield hospital, the country's premier heart hospital, which has carried out more heart transplants than any other in the world. It is threatened with closure at a time when the Government are supposed to be having a drive against heart disease and placing particular emphasis on cardiothoracic treatments, which are the speciality of the hospital.
Education is a continuing problem. The schools in Ruislip-Northwood are exceptionally good, particularly in the secondary sector. Pupils come flooding across the borough boundaries, and as a consequence, my constituents cannot get their children into the local schools. Quite rightly, they are extremely upset about it. None of the proposed measures will change that, because the Government are not prepared to alter the Greenwich judgment.
Police numbers are continually falling. A policeman on the beat is almost as rare as a swallow in winter, and people are desperately worried because crime rates are rising in parts of outer London that never knew a crime wave before. They now have one with a vengeance; they suffer all the time and there are endless complaints to me and other local representatives. We have done everything possible. We have seen the Home Office Minister, Lord Bassam, the Commissioner of Police of the Metropolis, the district commander for north-west London and our own chief superintendent. We have done everything, but police numbers continue to fall, crime statistics continue to rise and public disillusion grows. Although more money is being provided, experienced officers and personnel are leaving the Metropolitan police in droves because they can get a better quality of life outside the force. Even this injection of extra money will not change that.
Last but not least, I turn to transport. We were told at the last general election that the public-private partnership would revolutionise the tube, that the service would be modernised and that the lives of my constituents who depend on commuting into central London would be much improved. The facts are different. We heard a statement from the Deputy Prime Minister only this
604
afternoon. The initial headlines were very favourable and the first edition of the Evening Standard paid glowing tribute to the effects of the extra moneys which were to be provided. The headlines were:
Ken gets £3.2bn for Transport … CrossRail to go ahead … New east London Tube … Huge boost for buses
However, the second edition carried the headlines:
Ken rages at tube "Stitch-up" … Prescott's extra £3.2bn for London ignores huge Jubilee bill, says Mayor.
This is typical of all Labour's pronouncements. They appear very attractive, but when one reads the small print one sees how unattractive they are. Because the current administration at county hall—or wherever the Greater London Authority headquarters are—will have to pick up the tab for the overrun in the Jubilee line extension, there will be virtually nothing left to pay for improvements in services. The office of the hon. Member for Brent, East (Mr. Livingstone) put it rather well. A representative told the Evening Standard that by the time the extra money has been found for the Jubilee line extension, the GLA will be left with "peanuts". That was not how the Deputy Prime Minister put it in his statement on public expenditure.
Finally, I turn to the area of departmental spending that I know best, because it demonstrates the sleight of hand of the current Administration. It was the first departmental sector referred to by the Chancellor in his statement on Tuesday, when he said:
I turn now to the departmental allocations. In recent years, in addition to their conventional responsibilities, Britain's defence forces have taken on a new and valued role in international peacekeeping and in conflict prevention, promoting human rights and peace throughout the world, including in Sierra Leone and Kosovo. To complete the restructuring agreed in the strategic defence review. and to fund new equipment and increase the mobility of our front-line forces, defence spending, which has fallen in real terms every year since the end of the cold war, will now increase in real terms.—[Official Report, 18 July 2000; Vol. 354, c. 221.]
The press release on that subject was challenged by The Daily Telegraph yesterday because the facts are otherwise. In 1996, the Government of my right hon. Friend the Member for Huntingdon (Mr. Major) announced a budgetary increase in defence expenditure of 0.4 per cent. in real terms. So the civil servants had to correct that in a hurry.
It is clear that the commitments in Tuesday's statement are shallow, insubstantial and inadequate. Let us look at the roles. The British armed forces have always been involved in international peacekeeping, conflict prevention and promoting human rights throughout the world. That is why they fought in Korea, and that is why they have been engaged in countering terrorism in Northern Ireland and supporting United Nations operations from East Timor to Kosovo. There is nothing new about that; they have always done it. The amount of extra money is actually very small. In real terms, it is 0.1 per cent. in the financial year 2001–02, 0.2 per cent. in 2002–03 and 0.7 per cent in 2003–04.
The major projects report for 1999 from the National Audit Office shows that cost overruns continue to escalate. Between 1993 and 1999 they increased in absolute and in percentage terms—so much for smart procurement. In fact, they are getting worse. In 1999 they amounted to £1.36 billion, increasing by 6.3 per cent. in one financial year. Against that background, how will the

605
armed forces be able to redress the shortfall in the infantry of some 5,000, the deficiency in fast jet pilots of some 120, and the constant outflow of experienced personnel who vote with their feet, or on the dictate of their wives, who can no longer stand the long separations?
In short, the increases are basically a fraud. That is not limited to the defence sector, but applies to many other Government Departments.
4.38 pm
Mr. Malcolm Chisholm: I thank the hon. Members for Ruislip-Northwood (Mr. Wilkinson) and for Sevenoaks (Mr. Fallon) for their warm tributes to my hon. Friend the Member for Tottenham (Mr. Lammy) on his maiden speech. I join them in congratulating him on a superb speech, which included a moving tribute to the great Bernie Grant and highlighted the importance of public expenditure in Tottenham.
This week, we can all celebrate a massive expansion of public expenditure that is based neither on rising taxation nor on high levels of borrowing, but on the successful running of the economy during the past three years. One of the most interesting aspects of the public expenditure statement was the revelation that, under the previous Government, 42 per cent. of additional expenditure went on debt repayment and social security, whereas, in the coming period, by contrast, the figure will be 17 per cent.
We must emphasise the importance of increasing employment in enabling the public expenditure increase to take place. I will probably be the only Scottish speaker today, so I shall speak about Scotland as much as I can. We have in Scotland the highest number of people in work since England won the world cup—that also happened under a Labour Government. Contrary to what the Conservative party said would happen, that large expansion in employment took place after the introduction of a minimum wage and improved conditions in the work place.
If a choice has to be made about raising taxation, I would personally argue that that may be justifiable, because I agree with Larry Elliott's assertion in The Guardian this week that tax is the price that we pay for a civilised society; but it is most important to emphasise that, over the period in question, tax as a percentage of GDP will fall. As my right hon. Friend the Chief Secretary said, net borrowing over the period will be lower than at any point in the previous Parliament.
Conservative Members have emphasised what they call the macro-economic dangers of the Government' s public expenditure stance, but it should be noted that the Bank of England's most recent quarterly inflation report, written at a time when it knew exactly what growth in public expenditure was planned, because of the Budget statement, said clearly that the Budget's macro-economic effects were unlikely to be large.
The minutes that have been quoted liberally and one-sidedly by Opposition Members today reflect some division between various members of the Monetary Policy Committee. For example, David Walton of Goldman Sachs, as quoted in this morning's Financial Times, pointed out that several members of the committee think
606
that interest rates will be able to fall, even with this public expenditure projection, partly because average earnings growth has been slowing.
Mr. Ruffley: Does the hon. Gentleman accept that it is not just the aggregate increase in expenditure but its composition that the Monetary Policy Committee will have to consider when it meets next month to decide on interest rates?
Mr. Chisholm: I am just coming to the composition of public expenditure. Obviously, one of the virtues of increased public expenditure is that it can help the economy, and sustainable growth in particular. I am thinking particularly of my right hon. Friend the Deputy Prime Minister's statement today, in which he said that capital investment in transport was to be doubled. My right hon. Friend the Chief Secretary to the Treasury reminded us about education expenditure, which again is crucial for economic as well as other reasons. He informed us that the increase in education spending over the five-year period will be greater than in the whole 18 years of Conservative government. He also spoke about the important investment in science and research.
This is a significant moment, when public expenditure is once again set to climb above 40 per cent. of gross domestic product. I certainly hope that, when we have variations in public expenditure during the next decade or so, they will be within a spectrum above 40 per cent. of GDP, which is still significantly lower than in other European countries.
Public expenditure is important not only for economic efficiency but for social justice. One of the main points that my hon. Friend the Member for Tottenham emphasised was the importance of public expenditure for an anti-poverty strategy. Part of that strategy comes through the main spending programmes. Clearly, the attack on health inequalities is a priority both here and in the Scottish Parliament. I believe that it will be one of the targets in next week's health statement. There are many admirable new initiatives, which we have so far heard about only in relation to England, such as the children's fund and the neighbourhood regeneration fund. No doubt, we will hear about similar measures for Scotland in the autumn.
Sir Robert Smith: Does the hon. Gentleman think that one of the consequences of a stop-go funding policy for health is the creation of a serious crisis in recruitment? The problem with getting a radiology appointment is the shortage of radiologists. Spending extra money will not train them overnight.
Mr. Chisholm: The simple fact is that health funding has never stopped—even in the difficult first two years of this Government, extra money was found for health—but the hon. Gentleman makes the sensible point that it takes longer for health initiatives than, for example, for certain education initiatives, to come on stream.
Apart from the mainstream programmes, there are many specific initiatives in the anti-poverty strategy. The research last week by the National Institute of Economic and Social Research has been misrepresented. It confirmed the importance and success of the new deal,

607
and of the working families tax credit and the minimum wage in terms of making work pay. All those initiatives would be threatened, if not abolished, by the Conservative party.
The figure of 17 per cent. as against 42 per cent. of additional spending on social security and debt repayment is important. I would prefer it if we could split up the social security budget so that the money going into unemployment benefit is separated from what Labour Members see as the desirable features of the social security budget. Many aspects of the social security budget are important in the formulation of an anti-poverty strategy.
We will obviously hear more about pensions in the near future, and I will not complain about not hearing more about them this week, as long as I hear more about them in the autumn. The Scottish Affairs Committee recommended the restoration of the link with earnings, which I applaud, and came up with the interesting suggestion that perhaps the working families tax credit could be improved if we dealt with the issue of the withdrawal of housing benefit. I hope that the recommendation for a pilot study will be considered favourably.
There are important parts of the social security budget that must be improved as part of an anti-poverty strategy, but that is not to take anything away from the great improvements in the spending Departments, many of which will impact directly on those living in poverty.
One of the reasons why we have no more Scottish speakers today is that the money for Scotland will not be distributed until the Scottish Parliament reconvenes in September, so all that we know is that we will get a global increase of 4.4 per cent. a year in real terms, which is a significant and welcome increase. The only decision that has been made relates to health, as the health announcement was made in the Budget.
I hear a lot of talk in public and in private about the Barnett formula, so I should share with English Members the fact that, in Scotland, as the Scottish National party keeps saying, the percentage increase that we are getting—health is the only one that we know about so far—is less than in England. That mathematical fact is not especially surprising, but a lot of English Members do not appreciate it. In other words, the Barnett formula is a convergence formula. As Scotland starts with a higher base and gets the same increase per head, that translates in each of the spending programmes into a lower percentage increase. People who criticise the Barnett formula should understand that. Even those who want to get rid of the formula surely would not want to pull the plug on Scotland—not unless they wanted to create an independent Scotland, which would be the general effect in political terms of slashing public expenditure in Scotland.
Some Liberal Democrat Members support the Barnett formula. However, another third of the party wishes to proceed to a new needs assessment for Scotland, while the final third supports fiscal autonomy for the Scottish Parliament. In the short term, it is better to stick with the Barnett formula, although I am not lacking in confidence about the ability of Scotland to argue its corner in terms of need.
In Scotland, the health budget is bigger per head than the English budget but is growing significantly more slowly. If we look at health from the point of view of
608
need, the health needs in Scotland are significantly greater than in England according to all statistics, for the simple reason that people die significantly younger. All the health indicators are worse in Scotland than in England. Given that health accounts for one third of the Scottish Parliament's budget, it would be easy to put up a strong case for the levels of health expenditure that we receive.
What would be indefensible in a Scottish and UK context is to argue for the massive public expenditure cuts that are the implication of the Conservative party's arguments this week. I thank my right hon. Friend the Chief Secretary for pointing out, courtesy of a Conservative briefing, that £1.4 billion would be cut from the Scottish budget if the Tories were to have their way. I have yet to hear any explanation from the Conservatives of where they are to make cuts.
I almost felt sorry for the shadow Chief Secretary, who was sent round the television studios the other night by the shadow Chancellor. When asked how he would find £16 billion of cuts, all that he could come up with were a few political advisers. I do not know how much he thinks Labour political advisers are paid, but he will have to come up with something better than that.
Sir Robert Smith: If those political advisers were paid £50,000 a year, it would mean that there were 320,000 spin doctors.
Mr. Chisholm: I thank the hon. Gentleman for his helpful point.
I conclude by welcoming this significant boost to public expenditure. This is a significant political moment, when the balance of argument has shifted decisively in favour of public expenditure after two decades in which the assumption has been, in England at least, that high levels of public expenditure were not politically popular. Now the climate seems to have changed in England—although I must say that it has always been the case in Scotland that we support high levels of public expenditure.

ROYAL ASSENT
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:

Appropriation Act 2000

Crown Prosecution Service Inspectorate Act 2000

Terrorism Act 2000

Limited Liability Partnerships Act 2000

Royal Parks (Trading) Act 2000

Care Standards Act 2000

Television Licences (Disclosure of Information) Act 2000

Carers and Disabled Children Act 2000

London Local Authorities Act 2000

4.54 pm
Mr. David Ruffley: Before I begin my remarks on public expenditure, I would very much like to endorse the comments from Members on both sides

609
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;
610
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

611
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
612
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: 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.

613
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.
614
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: 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

615
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
616
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

617
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: 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: 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
618
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

619
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
620
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: 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

621
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: 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.
622
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.

623
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
624
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: 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.

625
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
626
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: rose—
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

627
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: 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: 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

629
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: 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
630
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

631
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: 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.
632
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

633
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.
634
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".

635
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
636
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.

637
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.

639
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
640
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

641
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.

Church of England (General Synod) (Measure)
7 pm
Mr. Stuart Bell (Second Church Estates Commissioner, representing the Church Commissioners): I beg to move,
That the Church of England (Miscellaneous Provisions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for Her Royal Assent in the form in which the said Measure was laid before Parliament.
This Measure of the General Synod deals with uncontroversial items and relatively minor matters, which would not necessarily ordinarily merit free-standing legislation. In parenthesis, may I add how much I welcomed the maiden speech of my hon. Friend the Member for Tottenham (Mr. Lammy)? He is a member of the General Synod and the Archbishops Council. He will find the House hospitable, rather than hostile. That is certainly so when we deal with Church legislation.
The Measure contains a number of important clauses dealing with the devolution to dioceses of functions of the Church Commissioners following the passage of the National Institutions Measure 1998 through Parliament. In that sense, the Measures are like stepping stones across a stream, one following another on to the statute book. I should say at the outset, however, that the provisions have been discussed and agreed with the dioceses.
The provisions are dealt with in clauses 1 to 11 and schedules 1 to 6. Clause 4 and schedule 2 provide in financial matters for the transfer of the diocesan stipend funds' accounts and the associated income accounts to diocesan boards of finance. Clause 10 and schedule 6 provide for the transfer of diocesan pastoral accounts to dioceses to formalise the devolved administrative arrangements already in place in respect of these accounts.
The draft Measure provides a vehicle for streamlining and lightening the commissioners' regulatory role in areas such as parsonages, glebe and those associated with the Pastoral Measure 1983. It is estimated that cost savings for the commissioners could amount to about £50,000 per annum if the House and the other place approve these proposals and they are implemented. None of these costs would fall on the dioceses instead, and it is expected that there would be savings in dioceses as well, especially in terms of time spent on seeking the commissioners' approval for various transactions.
Similar proposals are suggested for glebe matters, in which the commissioners' main role would be reduced to considering transactions that do not meet agreed criteria and to carrying out the appellate function set out in paragraph 9 of schedule 5. Again, cost savings for the commissioners are expected to be about £50,000 per annum, and none of those would fall on the dioceses instead.
As to other miscellaneous matters, perhaps I should draw the attention of the House to clause 12. This makes a useful provision for use where the office of rural dean is vacant, or where the rural dean is unable to carry out his or her functions.
Clause 15 brings the Ecclesiastical Jurisdiction Measure 1963 into line with other categories of appeal to the Judicial Committee of the Privy Council by providing that an appeal may be made only with leave to appeal. The Privy Council has signified its agreement to this amendment.

643
Clause 17 amends the Patronage (Benefices) Measure 1986, which was introduced not that long ago. I always like to throw a little poetry into a debate, so let me quote:
And see how dark the backward stream
A little moment passed so smiling.
Enough of the "backward stream" has passed since 1986 to make it necessary to amend the 1986 Measure and render it possible for the transfer of right of patronage to be registered even when presentation to the benefice has been suspended under the Pastoral Measure 1983.
To conclude, the measure is useful, if uncontroversial, and will streamline some of the procedures of the Church. I therefore trust that the House will agree to the motion in my name on the Order Paper, and I commend the Measure to the House.
7.5 pm
Sir Patrick Cormack: I am delighted to respond to the wise words of the hon. Member for Middlesbrough (Mr. Bell). I am somewhat surprised that the House is not packed, and that you have not already had to call us to order several times, Mr. Deputy Speaker.
Mr. David Drew: It is packed on this side.
Sir Patrick Cormack: Of course it is. On this side, as on that side, there are lots of people waiting to speak on the wonderful Measure. To be serious, as a Front-Bench spokesman I can, for once, agree with everything that has been said from the Government Front Bench. This is a tidying-up measure or series or measures.
I join the hon. Member for Middlesbrough in welcoming, in absentia, the new hon. Member for Tottenham (Mr. Lammy), who has an important role to play in the Church of England. I hope that, having made his maiden speech this afternoon, he will now contribute to our debates on Church affairs. It will be most useful to have his contributions, and I am sure that we all look forward to them.
The hon. Member for Middlesbrough went over some of the more important provisions in the Measure, and discussed rural deans. The one thing that he did not mention, which is expressly provided for in the Measure, is the fact that at the discretion of the bishop, rural deans can now be called area deans, which in built-up urban areas, obviously makes a degree of sense.
This is a series of small but important tidying-up measures. It is right that the House should have the opportunity to discuss the Measure, but it would be wrong to contemplate sending it back to Synod, or anything similar. I welcome the hon. Gentleman's words, warmly endorse them, and hope that the Measure will pass swiftly on to the statute book.
7.7 pm
Mr. Simon Hughes: One of the paradoxes of this place is the fact that a Scottish Deputy Speaker is presiding over Church of England business, which requires the usual assent of hon. Members, regardless of their origin, the country that they represent, or their theology. As someone who normally looks after home affairs, I reflect that it is just my luck that on the only day in something like six months on which there has been no home
644
affairs business, the only other thing for which I have technical responsibility—Church of England business—pops up on the agenda, making sure that I cannot go far away.
As the Second Church Estates Commissioner and the hon. Member for South Staffordshire (Sir P. Cormack) both made clear, the Measure is unusual in being almost entirely uncontroversial. The Ecclesiastical Committee of both Houses has recently considered many Measures that have been unusually difficult, to say the least. Indeed, the Ecclesiastical Committee recently stood its ground for the first time against the combined weight of the General Synod, saying that it had a function to perform. We sent back a Measure concerning the power of church wardens and the powers of bishops in relation to them, because we were not happy with it. I believe that we were right to do that, and there was wide consensus.
Mr. John Austin: In case my presence is misunderstood, I shall explain my position. The hon. Gentleman referred to the Measure as uncontroversial. I regard it as very controversial. The hon. Gentleman will know that I am a member of the all-party humanist group and a sponsor of the early-day motion calling for the disestablishment of the Church of England, for which I shall continue to press. It is inappropriate for these matters to be debated in this House at all, as they should be dealt with in Synod. However, I am here because I am waiting for the petition.
Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We will come on to the petition quite soon, so long as we keep to the Measure before us. These other matters are nothing to do with the Measure.
Mr. Hughes: There is no risk at all of my straying from the Measure. The hon. Member for Erith and Thamesmead (Mr. Austin) may have registered this point, but it would be discourteous of me not to point out that although I speak on these matters for my party, my view, and that of my party, is that the Church of England should be disestablished, and that this matter should not come before the House. The hon. Gentleman and I therefore share that view, irrespective of our difference of belief.
I want to talk about only two matters in relation to a Measure that has the unanimous support of the bishops and the clergy, and the support of all but two members of the laity. As someone who was a member of the General Synod for a short time, I know that that is pretty unusual. The first matter is the provision mentioned by the hon. Member for South Staffordshire (Sir P. Cormack), which is the power for a bishop to redesignate rural deans as area deans. That is extremely welcome, and not before time.
Representing an urban seat in the diocese of Southwark, I know that it does not help the Church's credibility to have senior people in its hierarchy designating as rural deans people who work in places that could be regarded even as partly rural only on a very good day, with a great stretch of the imagination. Southwark used to be in the county of Surrey, and extremely rural, but we are down to two urban farms and a few parks; that is the extent of our rurality.
The second matter worth comment is that the Measure—which is like a Law Commission consolidation provision, in that it tries to bring a lot of legislation up to date—allows a new procedure for changing the name of

645
a diocese. It is important to bring that up to date. The debate was triggered by controversy about the diocese of Ripon. It was so named for important historical reasons, but the name could be regarded as deceptive and unhelpful, given that the largest population centre in the diocese, Leeds, does not feature in it. It is proper to provide a way of dealing with a desire, not to get rid of the Church's important historical centres, but to rename dioceses to reflect changing populations.
Having spent a short time as a member of the General Synod, I too welcome the hon. Member for Tottenham (Mr. Lammy) to the House as a fellow London Member and a fellow member of the Church of England.
The principal job of the Church of England is to reach the parts that other theologies and faiths do not reach, and to recruit people to be followers of Jesus Christ. The trouble with an established Church—perhaps with any Church—is that there is a huge amount of bureaucracy and paperwork, as the hon. Member for Middlesbrough (Mr. Bell) will know better than me. The Measure reflects acres of paperwork that has gone into the process of revising legislation.
This is not a matter to be dealt with today, but I wonder whether it would not be helpful if the Church, to make its life easier, set up a one-off Church law commission to consider all existing Church legislation; to consolidate it where appropriate, and to get rid of the remainder that is out of date. That need not be a threatening or undermining process, and it would deal with the fact that, as in this place, there is a huge amount of legislation that is out of use and inappropriate. The hon. Gentleman and his colleagues may reflect on whether that is possible.
I pay tribute to those who do the work, because a huge amount of work has gone into the Measure, but I suggest that we might be able to reduce their work, and that of others, if we swept up Church legislation once and for all, and brought more consolidating and tidying-up Measures to the House. The Measure is welcome, and like colleagues from other parties, the Liberal Democrats support it.
7.14 pm
Mr. Bell: With the leave of the House, Mr. Deputy Speaker, I will respond to the debate. I will not add to the acres of paperwork by making a long speech that will deluge the pages of Hansard, so I will not elaborate too much on the comments made by the hon. Members for South Staffordshire (Sir P. Cormack) and for Southwark, North and Bermondsey (Mr. Hughes). I welcome their support; it is important that we reach consensus on these matters in the House and in the other place, and the wider the consensus, the better.
The Ecclesiastical Committee reviewed the Measure and supported it fully. I take on board the suggestion about how we might handle Church matters as they relate to the Synod and to the House in future. I am always happy to take the suggestions of the hon. Member for Southwark, North and Bermondsey back to the Commission so that they can be examined for the long term within the wider Church.
646
I am grateful for the support of the House and I commend the motion to it. I am grateful to you, Mr. Deputy Speaker, regardless of your nationality, for being in the Chair for this important debate.
Question put and agreed to.
Resolved,
That the Church of England (Miscellaneous Provisions) Measure, passed by the General Synod of the Church of England, be presented to Her Majesty for Her Royal Assent in the form in which the said Measure was laid before Parliament.

PETITIONS

  Park Homes
  7.15 pm
  Mr. David Drew: I am delighted to follow the Church Commissioner and to present a petition on behalf of two groups of residents who live in park homes in Berkeley Vale park in Berkeley and in Riverside park in Eastington, both in my Gloucestershire constituency.
  The petition states:
  The present council tax banding system for park or mobile homes is unfair, as it caters inadvertently for such park homes (sometimes called static vans), placing them side by side with other properties of conventional construction of much more rapidly appreciating value. Moreover, many park home residents, especially retired, make comparatively little use of council services, thus increasing the sense of inequity.
  The petitioners therefore request that the House of Commons urge the Secretary of State for the Environment, Transport and the Regions to consider a new lower band for park homes which better reflects the means and needs of these residents.
  To lie upon the Table.

  Health Centre, Erith
  7.16 pm
  Mr. John Austin: I have a petition from residents of Erith, Slade Green, Belvedere and Northumberland Heath in the London borough of Bexley, and a petition in like form signed by more than 1,000 residents is being delivered to the regional health authority.
  The petition declares that
  there is a great need for a new health centre in Erith, which has been in the planning process for many years; that the Government decided initially that this should be provided under the private finance initiative, but has now concluded that this would not represent best value for money; and that it should be financed by traditional public finance, although capital funding has not been identified for this purpose.
  The petitioners therefore request that the House of Commons urge the Secretary of State for Health, in conjunction with the Bexley and Greenwich health authority, London borough of Bexley council and the Oxleas Trust to ensure that this much needed health centre project goes ahead.
  To lie upon the Table.

School Transport
Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]
7.18 pm
Mr. Alan Hurst: I thought for a moment earlier that we were to have a vigorous debate on antidisestablishmentarianism, but the moment seems to have passed, and I have the pleasure of raising the matter of home-to-school transport provision. I see my hon. Friend the Member for Stroud (Mr. Drew) in his place, and I know that he is familiar with the subject. It affects all our shire counties and many of our metropolitan areas.
This coming Monday will almost be a day of jubilation for the motorist. It is the first effective day of the school holidays. It will be possible to travel freely about the roads of our countryside. We will not have to deal with the fact that at 8.50 in the morning, 20 per cent. or more of all car movements involve taking children to school. I assume that the same situation appertains later in the day when children are collected from school, but that may be spread over a slightly longer period.
I remember growing up in the 1950s, and I see that I am in good company with others who may remember those times. At the age of six, I would walk from where I lived on the edge of an urban area to school across fields, down lanes and along roads. I was unaccompanied by my mother or father. It may be thought that I was especially precocious, but walking to school was relatively commonplace in those days; children would walk together in groups. Car ownership was rare; if there was a car in the family, one's father would have taken it to work long before the school hour approached.
Nowadays, car ownership is almost universal. Roads are dangerous and exceptionally busy; parents rightly fear the dangers of those roads for their children, and other, darker dangers that may lurk if children are allowed to travel unescorted to school.
The subject of the debate derives from the Education Act 1944, and the Education Act 1996, which deals with school transport. The formula is that, if the local authority is to provide free transport, the child must live 3 miles away from the school if older than eight and 2 miles away if younger than eight. That formula varied from county to county. In Essex, the local authority has modified those standards to be 1.5 miles for children in infant classes, 2 miles for junior school children and 3 miles for secondary school children.
Legislation also contains a fall-back clause, which allows local authorities, in exceptional circumstances, to provide free school transport for those who do not fit the mileage criteria. It is difficult to be precise about what constitutes those exceptional circumstances. One could hazard that it might be a child's health, a child's domestic circumstances, but there is an element of discretion. However, I have not commonly come upon its exercise.
Free school transport is also provided for children with special needs, who are normally taken to infant school by taxi. The nature of the travel and the distance often makes up a substantial part of a local authority's budget for home-to-school transport. It is not easy to find the exact figures for the number of children who use free school transport throughout England and Wales. I believe that there is an estimate—I am sure that my hon. Friend the
648
Minister can assist me further—of approximately 20 per cent. The amount of money spent on home-to-school transport nationally has increased in the past few years. I believe that, depending on the formula, it now exceeds £400 million per annum.
In Essex, 25,000 children out of a total school population of 200,000 receive free school transport; 10 per cent. of those have special needs. Excluding the special needs children, the percentage is little more than 11 or 12 per cent. The county is large and widespread since the exclusion from it of some urban areas to form the unitary authorities of Thurrock and Southend.
Like others who have served on county councils, I have become familiar with the tussles that occur when parents are denied free school transport for their child. There are stringent limits on local authority finances; consequently they sometimes seek to withdraw routes that hitherto existed on the basis that an alternative route can be found.
In my constituency, the distance by road between the famous socialist village of Silver End to Witham is a little more than 3 miles. Across fields and ditches, it is slightly less than 3 miles. A keen cartographer at county hall studied a large-scale version of the Ordnance Survey map and plotted a route, which took the distance slightly below 3 miles. I had the adventurous privilege of accompanying the county council inspection party that came to assess the route. It began along an especially dark and overhung footpath, and proceeded through ploughed fields, which were dusty in summer and caked in winter. A group of senior councillors proceeded along that route until we came to large ditch.
I knew that the county official had misdirected himself on the route, but I exercised my right to remain silent. A senior elderly lady councillor said, "I've seen enough. School transport shall remain." I hope that that extreme example illustrates the point: should the county or any of us consider sending children across fields, lanes and ditches—accompanied or otherwise—to avoid providing free school transport? The Government have made great strides in considering the way forward for home to school transport and the school travel advisory group has come up with a range of ideas in addition to school transport whereby walking and cycling to school might be increased.
I refer to a place that is indelibly carved in the mind of my hon. Friend the Minister—the village of Hatfield Peverel in my constituency, which he kindly visited recently in one of his other roles. Although the school is all but surrounded by that self-contained village, there are dangerous and busy roads so the parents and the school got together to form what is called a walking bus. I spoke to the headmaster, Mr. Jeremy Crook, this week and he told me that 80 children were involved at the scheme's outset. I do not know whether you are aware of the concept of the walking bus, Mr. Deputy Speaker. It is not a bus at all, but a party of children gathered together in the presence of a number of adults who proceed along a defined route and stop at specified places to collect or deposit children. That enables children to walk to school in safety.
Although the walking bus and dedicated footpaths and cycle paths are great aids that facilitate travelling to school without using a car, I would not want it to be thought that we can avoid the home to school transport question by using such innovations. Car usage could be

649
reduced dramatically if we reduce the number of children who go to school by car. We could do that quickly and effectively by making much more liberal regulations and criteria for allowing home to school transport.
I hope that this is an opportune time to raise these matters—the transport plan has been announced this very day, to a fanfare—and that I have shown that the sum expended on home-to-school transport is modest in terms of total transport expenditure. If distance requirements were lowered and councils given much greater discretion to book buses, sell off concessionary tickets and take a much broader view of who can travel on free school transport, we could achieve that which seems to have eluded people in the 20th and 21st centuries: planning and delivery following each other very rapidly indeed.
If that route is followed, we may achieve remarkable reductions in car movements at two particular times of day and I should be most interested to hear the public's observations on how they feel about driving during the school holidays as against term time. The benefits would go not only to the children, who would travel to school safely and accompanied, but to road users and to us all. We would all benefit from the lessening of pollution in the atmosphere as vehicles would not be used. Also, the strain on parents would be lessened as they would not have to accompany and drive their children to school twice a day, sometimes to more than one school.
I have seen figures for the number of children who travel by car, but I would estimate that the figure for junior and infant school children may be more than 50 per cent. Certainly, that is the estimate given by head teachers in the villages in my constituency of the number of children who travel by car to junior schools.
I hope that my hon. Friend the Minister, who has a great heart for these matters, will discuss with his colleagues how he can increase the use of free school transport and make it universal beyond the age of 16 to 18, when children go on to further education. The benefits of that would be remarkable and the comparative cost, I suspect, relatively small.
7.30 pm
Mrs. Christine Butler: I thank my hon. Friend the Member for Braintree (Mr. Hurst) for allowing me to make a short speech in his debate. May I also take this opportunity formally to thank my hon. Friend the Under-Secretary for his visit to my constituency some months ago? His attentiveness, his appreciation of the difficulties and his consideration of the possible solutions were much appreciated. I was delighted to see, probably for the first time, the words "Canvey island" shine out of a Government report. The local transport section of the east of England transport plan for 2010 features improved access to Canvey island as an area in need of regeneration. That buoyed me up for some hours—I did not need sugar in my tea all afternoon.
May I prevail on my hon. Friend's good humour a little further? First, I support the request made by my hon. Friend the Member for Braintree for a degree of free transportation within the overall transport budget, especially for home-to-school transport. Secondly, local authorities can apply their policies only under current legislation, which dates back some 50 years to 1944.
650
When I was a member of Essex county council, I first had it explained to me that that was a prohibiting factor in getting more children on to school buses.
The 1944 legislation, and even the amended version in 1996, still prevents increased capacity for children who do not meet the eligibility criteria for free school transport—those with special educational needs, or those over and above a certain travel requirement, to which my hon. Friend referred. It prevents others from having access to contract buses unless there is spare capacity—there is then a cut-off point. Many parents regret that and are even willing to pay for such places.
I regret that this all falls within the education budget. Overall, local authorities transport more pupils and students than meet those statutory requirements. That significant figure shows the support on the supply side for increased capacity for bus travel. Local authorities can charge for travel where spare seats are available, and the vast majority do. However, parents want more.
I shall not just bleat on about buses, because I welcome the many initiatives that the Government have taken over the past two years, including walking, cycling, safe routes to schools, road safety strategies, school travel plans and car sharing. Those are all important. Furthermore, I appreciate the cost-cutting approach to this problem. I understand that funding is coming from the Department of Health, the Department for Education and Employment and the Department of the Environment, Transport and the Regions.
We should revisit the legislation, because it seems to hamper increased bus use by students and pupils going and coming from schools. We should relieve ourselves of that problem and start on a fresh page. The statutory requirements could be lowered to less than 3 miles and 2 miles, so that children could be picked up from where parents want and be delivered safely home. At the moment, local authorities cannot contract to provide such a service, which is a great shame. In 1944, the requirements were different from what they are now. We have a pressing environmental need, which should count for more in our legislation. I am afraid that the problem will require primary legislation, but we should deal with this matter soon.
7.36 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I am grateful to my hon. Friend the Member for Braintree (Mr. Hurst) for raising the important issue of home-to-school transport. I know that it is of particular concern in his constituency, and he is a most assiduous Member. I have had the privilege of visiting him in Braintree to assist him in one of his many campaigns on behalf of his constituents.
I am also grateful to my hon. Friend the Member for Castle Point (Mrs. Butler) for her contribution to the debate. It was a pleasure to visit her constituency and join her in her indefatigable campaign on behalf her students. I am delighted that improved access to Canvey island is finally on the agenda. She has played a large part in raising the profile of Canvey island's transport needs. I hope that the press release was winging its way in no time at all after the statement of my right hon. Friend the Deputy Prime Minister earlier today.
The issue of home-to-school transport impinges on a range of other important and emotive issues. We want to be sure that children are safe from road traffic, and from

651
strangers. Children need to take more physical exercise for their health and long-term development. We know that children sitting in cars in congested, slow-moving traffic can be exposed to pollution levels three times higher than outside the car. If we reduce our reliance on the car for the journey to school as for other journeys, we will, as they say, be doing our bit for the planet.
We all notice how much clearer the roads are at half term and during school holidays. It is fair to say that that is to some extent attributable to a reduction in commuting associated with working parents taking time off during school holidays, rather than simply the absence of parents taking children to school. My hon. Friend the Member for Braintree was absolutely right to identify the statistics on school travel, which show that 18 per cent. of cars on the road in urban areas at the peak of the morning rush—which is at 10 minutes to 9—are taking children to school. The proportion of journeys to school by car has nearly doubled over the past 10 years to almost a third of all journeys, and 36 per cent. of primary pupils and over 20 per cent. of secondary pupils now travel to school by car. Bus use has remained relatively stable at around 20 per cent., walking and cycling have declined, although 55 per cent. of primary age pupils and 43 per cent. of secondary pupils still walk to school.
I understand the concerns that my hon. Friend has raised. I know that there is much still to do, but there is already a good deal going on, both nationally and locally. He wants an increase in home-to-school transport. The amount budgeted for and spent on statutory school transport by local education authorities has been increasing above the level of inflation in recent years. It is now a very substantial sum—around £450 million in 1998–99. It is true that some two thirds of that figure goes on pupils with statements of special educational needs. That leaves about £150 million for the 7.5 million pupils of compulsory school age without statements, giving LEAs little scope for additional, discretionary provision.
Let me remind the House of the real purpose and function of statutory school transport. It is not—and never was—designed as an all-inclusive school transport service. It is a safety net, to ensure that no child is denied the right to attend a suitable school because they live too far away, or have special needs, or face a dangerous journey.
Statutory school transport is not the only source of assistance. Local authorities have powers—but no duty—to establish concessionary fare schemes in their areas under the Transport Act 1985. About 40 per cent. of shire counties have a scheme for young people, though few are county-wide and some do not provide fare reductions in the morning peak. In the metropolitan areas, by contrast, all six passenger transport authorities provide either flat fares or half fares on local buses that are valid in the morning peak. Those schemes are supported by Government subsidy.
In the shire areas it is common for discounted fares to be offered commercially by private sector bus operators. There is no local authority involvement in such arrangements. The discount is usually half fare.
Here in London, Transport for London rather than local authorities operates a discount scheme for young people at roughly half fare. It is regarded as a commercial scheme, without Government subsidy. It covers the five-to-18 age group and is available in the morning peak.
652
Last summer, my Department commissioned consultants to review best practice in increasing bus use on the journey to school. They consulted widely with local authorities, schools and bus operators, and identified many examples of local action to promote bus travel for the home-to-school journey. The consultants have now reported, and are finalising a guide which draws together the main lessons from the study, illustrated with examples of successful initiatives, and we intend to publish it later in the year. We hope that it will stimulate other authorities in particular to consider what further measures they can take.
We are also planning a seminar with major bus operators later this year to discuss the scope for greater standardisation in the arrangements for child discounts on buses. I am sure that my hon. Friends the Members for Braintree and for Castle Point will welcome that.
My hon. Friend the Member for Braintree also said that he would like to see more walking buses and more safe routes to school for those buses to use. I can only say that I agree with him. We have been actively promoting such measures through guidance that we have produced for local authorities, parents, teachers and governors including a comprehensive school travel resource pack researched by Sustrans—the pioneer of safe routes to school. The resource pack was published by my Department in May to coincide with the launch of this year's walk-to-school campaign.
As my hon. Friend the Member for Braintree will also know, local authorities have been asked to prepare local transport plans setting out their strategies for tackling local transport issues, including school travel issues. We are providing more funds for the implementation of local transport plans.
As the House will be aware, my right hon. Friend the Deputy Prime Minister announced today details of our 10-year plan for transport which sets out a £180 billion spending programme—£132 billion from the public purse—to deliver the modern, integrated transport network that we all want to see. The funding for the implementation of local transport plans will almost double from £755 million provided for 1999–2000 to £1.3 billion for 2001–02.
In providing funds for local transport plans, we have given local authorities the discretion to utilise such funds from within a single block allocation—except for major transport schemes over £5 million—in accordance with their priorities and objectives set out in their local transport plans.
It is ultimately for local authorities to decide whether and how to take forward proposals for safe routes to school in their areas and to make the necessary running cost provision to support the development of walking buses, in the light of those local priorities.
My hon. Friend the Member for Braintree also said that he would like more work to be done to reduce car use for journeys to school. Again, I agree wholeheartedly, but we should not forget that much is already being done, not least under the auspices of the school travel advisory group—STAG—which was set up by my Department with colleagues in the Department for Education and Employment and the Department of Health in December 1998. The group brings together experts in education, road safety, child health and accident prevention, as well as transport co-ordination.

653
STAG oversaw production of guides for local authorities and schools, and a resource pack. Following advice from STAG, my Department commissioned six research projects in spring 1999. Two have already reported, providing a comprehensive database of current levels of activity—which, I am pleased to say, is increasing—and an informative report on the wide range of factors affecting distance to school.
The other four projects are due for completion and will result in the production of a best practice guide on the provision of special educational needs transport; a guide on increasing bus use for the journey to and from school; a database of classroom materials relating to school travel issues; and the possible implementation of a national programme of site-specific advice for schools following the evaluation of a pilot in 37 schools.
The first STAG report, published in January, proposed an aim to return by 2010 to the level of walking, cycling and bus use in the mid-1980s. That would mean 80 per cent. for primary school children and 90 per cent. for secondary school children. The report also contained 11 individual recommendations for raising the profile of school travel and increasing travel choices for the journey to and from school. The Government welcomed the report. We are already taking action on some of the recommendations and are considering how to implement the others.
654
In the road safety strategy, published in March, we set out our detailed programme for taking action to improve child road safety, including better child road safety education, better enforcement and raising driver awareness of school travel issues such as road safety for child pedestrians and cyclists, the dangers of parking near schools and excessive or inappropriate speed.
We continue to work to raise awareness of school travel issues, through a series of regional seminars for local authorities, teachers, parents and governors; a communication strategy aimed at both the specialist press and the wider public; and national television and radio advertisements, promotions and publicity as part of the "Are you doing your bit?" campaign.
All health authorities are developing health improvement plans for the three-year period 2000–02, based on local consultation. There should be particularly strong links between health improvement programmes and local transport plans on school travel, and guidance on joint working was published in October 1999.
I am grateful to my hon. Friend for introducing this debate. I and my colleagues in the Department for Education and Employment and the Department of Health regard the issues relating to school travel as very important. As I hope I have demonstrated, this is an area in which we have been active—
The motion having been made after Seven o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twelve minutes to Eight o'clock.