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Public Investment

2. Ms Rosie Winterton (Doncaster, Central): What steps he is taking to increase the proportion of national income spent on public investment. [159874]

4. Mr. Jim Dobbin (Heywood and Middleton): What real terms increases he plans in investment in public services in each of the next three years. [159876]

The Chancellor of the Exchequer (Mr. Gordon Brown): When the Government came to power, public sector net investment was equal to 0.5 per cent. of national income. The plans set out in the 2000 spending review will increase net investment to 1.7 per cent. of gross domestic product by 2003-04--a doubling of net public investment. The Government, with our expenditure and investment in health, education, transport and the infrastructure, are turning around 20 years of underinvestment and modernising our public services.

Ms Winterton: I thank my right hon. Friend for that reply, because increased investment in my constituency means a modernised accident and emergency department, new school buildings and work starting on major transport infrastructure projects. After years of Tory neglect, my constituents know that we need that investment to

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continue if we are to regenerate the area properly. Can my right hon. Friend give me that commitment and will he also give a high priority to housing investment, so that a hallmark of the next Government will be a decent home for all?

Mr. Brown: I am grateful to my hon. Friend for the work that she does on behalf of her constituents. She is absolutely right, and additional investment in housing is included in the public expenditure review. Equally, 68 hospital projects are proceeding as a result of decisions made since 1997, 17,000 schools have been improved and we are recruiting more nurses, teachers, doctors and consultants. That is the way forward to rebuild the public services. The choice at the election will be between those who would invest in the public services and those who would cut investment. Conservative Members will have to go back to their constituencies and explain which hospitals and schools they would cut, which nurses they would make unemployed and which teachers they would make redundant.

Mr. Dobbin: I thank my right hon. Friend for his reply. The investment so far in the schools and hospitals that serve my constituency has brought definite improvements and is most welcome, but what is needed is a second Labour term in which a sustained radical programme of investment, in partnership with local government and other public bodies, would provide the quality services that the people of this country deserve and demand. Will he guarantee that?

Mr. Brown: I am grateful to my hon. Friend and I thank him for the work that he does. Education expenditure is rising by £4 billion a year and it will continue to rise by £4 billion a year under our spending plans. Equally, health service expenditure is rising by £5 billion a year. It is rising from £49 billion to £54 billion to £58 billion to £64 billion. When have the Conservatives ever been able to talk about measures of investment as good as those and on a sustainable basis? I know that the choice in the coming campaign will be between more investment under this party and cuts in investment under the Conservatives.

Mr. Edward Davey (Kingston and Surbiton): Would the Chancellor advise voters to take more account of his plans for public spending or more account of his record? Will he for once admit that his record on public spending is as bad as that of the Conservatives, with average spending on health and education in this Parliament lower as a proportion of national income, not higher? Will he also admit that even at the end of the current spending review, Labour will spend less in 2003-04 as a proportion of national income than the Tories did in 15 out of those dreadful 18 years?

Mr. Brown: The hon. Gentleman asked me to talk about my record as well as my ambitions. Schools capital will have risen from the £600 million we inherited to £3.2 billion. Some 17,000 schools are benefiting from modernisation. In individual schools, an extra £3,200 brings the total amount paid to many primary school head teachers to £9,750. A typical secondary school head teacher can get up to £115,000 for the school.

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That is what we have done already, but in addition we plan to make available an extra £4 billion every year. I remind the hon. Gentleman, now that we are considering the past as well as the present and future, that the Government introduced a windfall tax on the utilities when we came to power. More than £1 billion of that money has gone to schools, but the Liberal Democrat party opposed the windfall tax. Will he say whether he still opposes it, as that is money that has gone to schools and education?

Sir Peter Tapsell (Louth and Horncastle): Has the Chancellor noted that the International Monetary Fund and the European Commission have both publicly warned him that his public expenditure plans are unsustainable, that they are incompatible with the European stability pact to which he unwisely signed up, and that they must inevitably lead to both inflation and higher taxes?

Mr. Brown: First, the stability pact that the hon. Gentleman finds so unacceptable was signed not by me, but by the previous Conservative Government. Secondly, he puts himself into a difficult position given his history as an ally of the European Commission. I will tell him what I told the Commission, which is that we will stick to our spending plans. They are the right spending plans for this country, and mean more hospitals, schools, teachers and doctors. They are what the people of this country want. The choice is between investing more under a Labour Government and major cuts in investment under a Conservative Government. The hon. Gentleman no doubt supports those cuts, but the Conservative party will have to explain them.

Ms Margaret Moran (Luton, South): First, I thank my right hon. Friend for putting extra public investment into housing, which was desperately needed after the previous Conservative Government slashed billions of pounds off housing investment. Will he commit to putting further investment into housing over the next four years to ensure that the homeless have a hope of a home, and that council tenants can enjoy security and investment in their homes? Does he agree that the Government's investment pledges are in sharp contrast to what the Opposition propose? The previous Conservative Government slashed investment in housing, and in their dying days removed the safety net for the homeless. More recently, the Opposition have blocked the Homes Bill, thus preventing further hope for the homeless. They now plan to sell council homes over the heads of their tenants, who will have no choice in the matter.

Mr. Brown: As always, my hon. Friend puts her constituents case very well. We will continue our spending plans on housing, health and education, because they are right for her constituents and for the constituents of every Member of Parliament. People will look at the Conservative plans for spending cuts, but they will also see that huge additional spending commitments have been slipped into the Conservative manifesto. They include family scholarship schemes, progress centres outside schools, a cops-in-shops initiative, secure training centres--[Interruption.] Tory Members are now cheering public expenditure.

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The problem for Conservative Members is that they will have to explain why none of their figures add up. They have made tax promises that are way in excess of what the country can afford. They say that they will cut spending, but are unable to deliver. Then, to please different sections of the electorate, they make spending commitments that they cannot afford. There are so many people on the Conservative bandwagon that there is not enough room left for the band.

Married Couples Allowance

3. Mr. Tony Baldry (Banbury): How many people have been affected by the abolition of the married couples allowance. [159875]

The Paymaster General (Dawn Primarolo): We are replacing the married couples allowance with the children's tax credit as part of a package of measures to focus resources on families with children. The children's tax credit is worth over twice as much as the married couples allowance and will benefit about 5 million families.

Mr. Baldry: I declare an interest in the answer to this question, as I am getting married in 15 days. Does the Paymaster General accept that the abolition of the married couples allowance was in effect a stealth tax on marriage, and that about 5 million couples who benefited from the allowance do not benefit from the child tax credit system? Does she also agree that 1 million of those who could benefit from the child tax credit system do not, and will not, because they have not applied for it? As a result, 6 million families are worse off. Would not it be much more straightforward to reintroduce a married couples allowance that would benefit all families with children under 11 years of age? I am glad to say that that will not include me.

Dawn Primarolo: I congratulate the hon. Gentleman on his marriage in 15 days' time. I am sure that he would accept that he is not in need of any financial encouragement to get married and does not believe that he would have benefited from the married couples allowance.

The resources used for the married couples allowance were paid regardless of marital status. The allowance was paid to single parents, divorcees and couples. The Government have focused those resources on supporting families with children. Some 85 per cent. of those who are entitled to receive the £520 a year through the children's tax credit have applied for it. I am sure that after the hon. Gentleman's wedding, he will join the Government in campaigning to ensure that the remaining 15 per cent. receive that money as well.

Mr. Malcolm Chisholm (Edinburgh, North and Leith): I served on several Finance Bills during the previous Parliament, in which the Conservatives cut and cut the married couples allowance without any compensating action for families. Is it not the case that the majority of people welcome the Government's focus on child poverty, and that they welcome not only the children's tax credit but the record increase in child benefit, the working

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families tax credit and child care tax credits, which have benefited families more than twice over, as my hon. Friend has said?

Dawn Primarolo: I understand that this will be my hon. Friend's last appearance in this House as he takes up his full duties in the Scottish Parliament. His campaigning for the Government to tackle child poverty is well known. He has made a substantial contribution to the development of the policies on the working families tax credit, the increase in child benefit and the increase in income support levels. Those policies have ensured that the Government have already lifted 1.2 million children out of poverty, and intend in the next Parliament to lift another 1 million children out of poverty.

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