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Mr. John Maples (Stratford-on-Avon): I hope that the Chancellor can help the House to understand something about his golden rule. If current spending grows faster than GDP, is it not inevitable that taxes must grow faster than GDP as well?

Mr. Brown: I think that the hon. Gentleman has misunderstood our rule. Current spending must be balanced by current revenues. That is the point of the rule, which applies over the cycle. Current public spending over this Parliament, if he looks at the figures, is 2.25 per cent. The difference, I suspect, between him and me is that while he wants to believe in a balanced budget, he will not show disloyalty to the shadow Chancellor, at least in the Chamber, although he will disagree with me. I suspect that that is his position. He obviously does not want to respond to that point. We think that it is right, given the needs of public investment in health, education, transport and our public services generally, that we should

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borrow where necessary for investment, subject to the discipline that we have upheld--the debt to GDP ratio will fall from 40 per cent.

As we have repaid so much debt this year--I thought that the shadow Chancellor might have applauded us for that--the debt to GDP ratio is falling to 30 per cent. Again, he has failed to answer the question: does he support a balanced budget or not? That is at the heart of the Conservatives' campaign. They want tax cuts, but they cannot tell us whether they support a balanced budget. Indeed, because they are in such a mess, they cannot offer any fiscal rules.

Mr. Geraint Davies: Does my right hon. Friend agree that the Tories cannot suggest fiscal rules because their express policy is to establish a new independent committee of economic advisers, presumably with Evan Davis on it, to oversee fiscal policy? They have no ideas of their own and no idea of how to run the economy--they want independent ideas. The public do not trust the Tories, so they say that someone else will run their policy.

Mr. Brown: I am not sure that that is an entirely new idea. The right hon. Member for Huntingdon (Mr. Major) is here, and he would agree that the introduction of the wise men before the Bank of England became independent was an innovation that happened under his Government as they tried to meet the inflation target and sought independent advice. Far from the idea being a great innovation in economic policy, it is simply a repetition of what has been done.

Again, we come back to this straightforward issue: if the Tories believe that £16 billion is the difference between what we are spending and what we can afford, they should have the courage of their convictions to say that. That is what the debate in the No Turning Back group has been about. If the Tories believe in a balanced budget, they should tell us that that is what they believe in. If they believe in a balanced budget, they cannot tell the electorate that they promise tax cuts. The way in which the debate has developed has been very illuminating.

Mr. William Ross (East Londonderry): Will the Chancellor give way?

Mr. Brown: Once more, then I must make progress.

Mr. Ross: I am not a member of the Conservative party, but I am interested in what the Chancellor said about the ratio of public debt to GDP. He did not make clear to the House what ratio he had in mind or whether that ratio was to total public sector debt or to central Government debt. Will he please elucidate?

Mr. Brown: The public sector debt is set out in the Red Book. We seek a figure of less than 40 per cent. Of course, in other countries debt can be a lot higher. We have reduced debt from the 44 per cent. that we inherited after national debt doubled--partly under the stewardship of the shadow Chancellor--to 33 per cent. It is falling to 30 per cent. in the next two or three years. The idea that we have not pursued a disciplined policy is completely outrageous. Again, the Conservative party cannot tell us whether it supports a balanced budget--three and a half

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years in opposition, four shadow Chancellors, lots of policy statements, and it cannot give us an answer to that simple question. That has been revealed this evening.

Now, the four challenges that we face as a Government are these: first, to entrench a culture of low--

Mr. Bercow rose--

Mr. Brown: I have been very generous in giving way to the hon. Gentleman, who has exposed the fact that he does not do research for these occasions.

The first challenge is to entrench a culture of stability and low inflation. That is why I believe that the whole House should be pleased that inflation is at its lowest for 30 years. Our second challenge is to seize the opportunity to build from the record 27.9 million men and women in work to a situation in which this country can achieve the goal of full employment.

We should coach the hard to employ--the young under-25s. We should bring the number of single parents in work up to 70 per cent. over the next decade. We should give the same responsibilities and rights to the partners of the unemployed, both to seek work and to get help in doing so. We should do more to help the disabled, many of whom want the chance to get back to work, but who, over the past 20 years, were denied the right to work. We should have the same regime of rights and responsibilities for the long-term unemployed. None of that could be achieved if we did what the Opposition want to do--abolish the new deal. I hope that the Conservative party will think twice about what ought to have been a bipartisan consensus: we should have a new deal in which young people and the young unemployed have the chance to get work.

The third challenge for our country is to build family prosperity--family prosperity for not just some but all our citizens. That is why we favour the working families tax credit, and why we will introduce a new children's tax credit.

The Conservatives plan to abolish the working families tax credit. Even Ronald Reagan said that the equivalent in the United States was the best family measure for which he and his Administration had been responsible, and George W. Bush asked Republican senators and congressmen not to punish the poor by refusing to raise earned income tax credit. This, however, is a Conservative party so far to the right that the only policy on family prosperity that it is prepared to advance is a policy to abolish the working families tax credit, and the children's tax credit now also appears to be at risk.

Mr. Gardiner: Under the children's tax credit, would not the benefit received by a family with one child increase from its 1997 level of £11.50 to £24.50? Is that not what would happen under this Government come next April?

Mr. Brown: My hon. Friend is absolutely right. In the case of millions of families, support for the first child, which was just over £11 when we came to power, could be as high as £24.50--even higher if one of our Budget proposals, which is out for consultation, is accepted. That represents a doubling of support for the first child of

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millions of families over the time in which we have been in office. It is more than we promised in our manifesto. It means that a million children can be taken out of poverty; it also means that every family in the country, rich or poor, has benefited from our policy of giving more support to families bringing up very young children.

Those are the issues on which we hope to make progress over the next year. What would the Conservatives have done? We would have been presented with the New Deal (Abolition) Bill, and the Working Families Tax Credit (Abolition) Bill. We might have been presented with the Children's Tax Credit (Abolition) Bill. As the shadow Chancellor has made clear, we would certainly have been presented with the Winter Allowance (Abolition) Bill. We would even have been presented with the Christmas Bonus (Abolition) Bill.

What Christmas spirit would have been involved in telling pensioners that they would lose the Christmas bonus for which, in fact, a Conservative Government legislated in 1972? It is clear that the Conservatives have abandoned the Christmas spirit, and that there are no wise men around in their party.

What about the free colour television licences from which 3 million pensioners currently benefit? The shadow Chancellor says--I think I quote him correctly--that it is a gimmick that patronises pensioners. He says, "We do not think we should patronise pensioners. We are going to get rid of the free licence, instead of patronising them by saying that we will hand out little dribs and drabs."

Mr. Portillo: No, we are not.

Mr. Brown: Is the right hon. Gentleman confirming that the Conservatives would not get rid of the free licence? [Interruption.] It appears that he is not.

The shadow Chief Secretary to the Treasury has a big interest in the matter. I recall that in 1997 he was a signatory to a Bill to abolish the exemption from payment for licences. He and his colleagues did not say that it was patronising or a gimmick, however. The present shadow Economic Secretary to the Treasury, then a Back Bencher, said:


He proposed to


The hon. Gentleman even went to his constituency newspaper, the West Sussex Gazette, which featured the headline "MP's crusade to abolish TV licences for the over-75s". He said that his Bill would correct the unfairness, and that he had met large numbers of pensioners aged 75 and over for whom the television licence was a substantial burden and worry. He went on to say that for the over-75s, the television licence was the main conduit to communication, information and entertainment. He thought that the top priority should be a simple and tangible measure that was directed and cost-effective and which brought help to 85 per cent. of the retired population who were in real need.

Who sponsored the Bill in the House of Commons? It was the shadow Chief Secretary, the hon. Member for West Dorset; the hon. Member for South Cambridgeshire (Mr. Lansley), who is in charge of the election manifesto

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that will commit the Conservative party to abolishing the free television licence; the senior vice-chairman of the Conservative party, the hon. Member for Westmorland and Lonsdale (Mr. Collins); the hon. Member for Bury St. Edmunds (Mr. Ruffley), who was an adviser to the previous Chancellor and is part of the Opposition's Treasury committee; one of the Opposition's health spokesmen, the hon. Member for Meriden (Mrs. Spelman); one of their education spokesmen, the hon. Member for Altrincham and Sale, West (Mr. Brady); and another vice-chairman, the hon. Member for North Norfolk (Mr. Prior).

There were so many on the bandwagon that hardly any room was left for the band. However, having gone one way, the bandwagon is now going in the opposite direction. We said that we could not trust the Conservative party on tax, but we cannot even trust it on television licences.

A silence has descended on the Opposition Benches. To be fair to the shadow Chancellor, he could not sponsor the Bill because he was not in the House at the time.


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