§ 8. Paul Holmes (Chesterfield)What estimate he has made of the level of public sector net capital investment as a proportion of national income over the period of the first comprehensive spending review. [35749]
§ The Chief Secretary to the Treasury (Mr. Andrew Smith)The figures, including the projection for the current year, which is the last year covered by the first comprehensive spending review, were set out in the pre-Budget report. They show that public sector net investment increased from 0.7 per cent. of gross domestic product in 1998–99 to 1.3 per cent. in 2001–02. That is an increase of £5.6 billion in real terms.
§ Paul HolmesI am sure that the Chief Secretary agrees that the Chancellor was right to criticise the Conservative Government for their shameful level of investment in public services between 1992 and 1997. However, Treasury figures show not only that the average percentage of GDP invested in public services was 1.5 per cent. a year from 1992 to 1997, but that that average was 0.6 per cent. between 1997 and 2002. That is less than half the Conservative Government's investment. Does the right hon. Gentleman agree that if the Conservative record was shameful, the Labour record in the past five years is a disgrace, and that it is no wonder that public services such as the national health service and transport are in such a mess?
§ Mr. SmithWe inherited a legacy from a Conservative Government who cut net public investment year on year. In our first five years, we doubled net public sector investment. This spring, such investment will be twice the level that we inherited. The hon. Gentleman has experienced the benefits of that in his constituency. As my hon. Friend the Member for Bolsover (Mr. Skinner) said earlier, the junction 29A development has brought £47 million of new investment to the area. Shirebrook has meant £27 million of investment, generating thousands of 831 jobs in north Derbyshire. It is the biggest investment in the area since the pits were sunk, thanks to Labour government, not Liberal Democrat opposition.
§ Mr. Harry Barnes (North-East Derbyshire)Hon. Members could bring an unending list of projects worthy of capital expenditure to my right hon. Friend's attention. I shall present a petition for funding in my constituency to him next week. Nevertheless, doubling percentage expenditure, which my right hon. Friend mentioned in his initial answer, is an exceptional achievement of which we should be proud. The development of junction 29 is a phenomenal improvement to provisions in Chesterfield, North-east Derbyshire and Bolsover. Those improvements are much needed and are now being provided. Will he simply refuse to listen to moaning minnies who put an alternative viewpoint?
§ Mr. SmithI thank my hon. Friend for his comments and commend him on his energetic efforts on behalf of his constituency. That is resulting in the benefits and schemes that he described. The contrast is simple: it is between a Government who believe in public investment and are substantially increasing it and a Conservative Government who cut it by an average of 15 per cent. a year in their last term in office. We are increasing it by 40 per cent. a year. That is a sharp contrast between Labour investment and Tory neglect.
§ Mr. John Bercow (Buckingham)Since 1997, the Government have raised an extra £130,000 million in taxes, but the Institute for Fiscal Studies has found that the lowest levels of net public investment as a share of national income since the second world war have occurred in the same period. Why?
§ Mr. SmithI should have thought that the hon. Gentleman would have started by thanking us for all the tax cuts that this Government have brought in, notably the 3 percentage point cut on business. On levels of public investment, I make no apologies to the House. It is the Conservative party that should apologise. After five years of Labour in government, public sector net investment will be more than double the level that it was when the Tories left office. The reason for that is that we are increasing that investment, whereas they were cutting it. The Conservatives cut net investment by an average of 15 per cent. a year in their last term; we are increasing it by 40 per cent. a year.
The people of this country are seeing the benefits of that investment not only in the programmes to which I have referred, but in the 245 modernisation schemes for accident and emergency units throughout the country that had been neglected by the Conservatives, in the 17,000 schools that have had repairs carried out, and in the 50 road schemes that are now under way. There is a very clear contrast between our investment and the Conservatives rundown.
§ Lynne Jones (Birmingham, Selly Oak)The Chancellor told the House a little while ago that Government debt was now around 30 per cent. of gross domestic product, compared with the Maastricht criterion of 60 per cent. of GDP. Does my right hon. Friend agree, 832 therefore, that the lack of availability of public capital should not be a factor in determining the value for money of private finance initiatives?
§ Mr. SmithThe private finance initiative and public-private partnership programme is additional to conventional public sector investment, which, as I have said, we have doubled during this spending review period. On the level of debt that we inherited, the 44 per cent. of GDP that the Tories left us was crippling the country through debt interest repayments. It is because we took the tough decisions that we did, and because we will stick to our tough fiscal disciplines, that we are saving £8 billion a year on the cost of debt interest. That is enabling us to make the record investment in public services from which health, transport, the fight against crime and our other front-line priorities are benefiting.