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Mr. Brown: That is exactly what the former shadow Chancellor and Chancellor said when we talked about the 2000 spending review—that it was unsustainable, that we would not be able to finance it, that it would cause inflation and that we would not be able to meet our commitments.

Mr. Clarke: I said that the Government would have to put up taxes.

Mr. Brown: The right hon. Gentleman said that it would be inflationary and unsustainable, and that has not been the case at all.

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As far as taxation is concerned, we put it to the country a few months ago that, after the Wanless report, it was necessary if we were to finance proper health service spending up to 2008 and to make that new decision, that we had the national insurance rise in place. If the former Chancellor, who believes in the national health service, unlike so many of his colleagues on the Conservative Benches, looked at the figures, he would support what we are doing in relation to the NHS.

The problem about the former Chancellor's position is that he wants to return to the old annual Budgets of the 1990s and the annual spending rounds in which spending was set in November, but then had to be changed during the year as a result of all sorts of different events. We are taking a far more long-term approach, and the reason why we can do so is that we have reduced national debt to a realistic level. If debt were at 44 per cent., the level left by the former Chancellor when we came into power, we could not do what we are doing today, but debt is down to 30 per cent., not least because we used the proceeds of the spectrum sale to pay off large amounts of national debt. I may say to him that if Opposition Members complain that we have not been fast enough in delivering all the improvements in public services that we want, it is precisely because we had to deal with the record of the Conservative Government under whom debt was at 44 per cent. and the borrowing requirement was nearly £30 billion. Inflation was rising when we came in and interest rates had to be put up.

Several hon. Members rose

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. However important the statement is, questions to the Chancellor cannot go on indefinitely. To get in as many as possible, I call on hon. Members to make their questions single and brief, and for equally crisp answers.

Mr. Tam Dalyell (Linlithgow): What contingency plans have been made for an attack on Iraq and rocketing oil prices?

Mr. Brown: My hon. Friend is Father of the House and makes his points in his usual way. As regards the defence budget, we make very cautious assumptions at all times about what is likely to happen to oil prices.

Sir Peter Tapsell (Louth and Horncastle): Implicit in the Chancellor's statement was the decision to follow Germany, France and Italy in breaching the rules of the European growth and stability pact. Did he note last week's stern warnings from the president of the Bundesbank and the International Monetary Fund that these across-the-board increases in Government expenditure without the prospect of matching growth will bring the viability of the euro into serious question? Will he take that risk into account when he examines his five vague economic tests?

Mr. Brown: Trust the hon. Gentleman to make the public spending announcements on education, health, transport and public services generally into a question about Europe. On the stability and growth pact, he is well aware of our views about the fiscal rules that we believe

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are appropriate to a modern economy and the debate that is being held in Europe about that. It is interesting that at the last election, the hon. Gentleman's manifesto said:

Surely he must support additional investment in health and education, as did his party at the last election, and should not he be telling his Front Benchers that the policy of opposing our investments in health and education is a road to electoral suicide?

Mrs. Anne Campbell (Cambridge): I thank the Chancellor for his statement and warmly welcome his assertion that housing and transport are particularly important parts of the infrastructure, especially in areas where there is a vibrant and healthy growing economy, as in Cambridge. Does he think it feasible for local authorities to set a target of 50 per cent. affordable housing in any new housing development, because that is what we desperately need in areas such as mine?

Mr. Brown: I am grateful to my hon. Friend. The interest that she has taken in science over many years has been a powerful influence on the Government's determination to get more resources into the science budget. On housing, she will know that I said that a statement was to be made by the Deputy Prime Minister on Thursday. He is committed to more affordable housing, especially in areas of great housing demand, of which my hon. Friend's is one. She will have to be patient and wait until he makes his statement on Thursday.

Mr. Nicholas Soames (Mid-Sussex): Does the Chancellor accept that although many Conservative Members and others welcome the increases in overseas aid and science, and some of those in education and health, my right hon. and learned Friend the Shadow Chancellor was right to say that the increases are not only unsustainable, but positively incontinent? Will the Chancellor tell the House precisely what have been the gains in productivity, especially emanating from the health service, since his last announcement of this type?

Mr. Brown: I have to tell the hon. Gentleman that when he looks at the health service, he will see that waiting times are coming down. When he looks at in-patient and out-patient waiting lists, he will see that they are down on what they were in 1997. When he looks at the building of new hospitals, they are proceeding apace. When he looks at the recruitment of nurses and doctors, he will see that we are getting them into the key specialties. When he looks at the accident and emergency units in our hospitals, he will see that we have repaired and renovated 95 per cent. of them over the past few years. I agree with him about one thing—more investment is needed, in education as well as in health. I am grateful that he has distanced himself from the position of his Front Benchers, which is to oppose investment in health and education.

Mr. Bill O'Brien (Normanton): I congratulate my right hon. Friend on his statement, which is designed to improve the quality of life of everyone in this country. On behalf of local government, may I ask him about the modernisation of housing? Will local authorities have some input into that modernisation programme? Will he consider carefully the authorities in the special interest group of municipal

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authorities—SIGOMA—where underachievement owing to poverty and deprivation is a major problem and crime hotspots need to be tackled.

Will my right hon. Friend consider giving funding to the hospice movement to ensure that there is no closure of hospice beds?

Mr. Brown: I will pass on to the Secretary of State for Health my hon. Friend's concern about support for the hospice movement. He rightly points to the neglect of housing over many years and the need for neighbourhood renewal as well as an attack on crime. We are a third of the way towards fulfilling our targets for decent housing. However, as my hon. Friend knows, considerably more remains to be done, and that is why we have provided the extra funding.

On improving the neighbourhoods in the areas that he described and their concerns about local government funding, we announced increases in the budget of the neighbourhood renewal fund. My hon. Friend also mentioned crime. The Home Secretary will make a statement on the criminal justice White Paper, and I believe that he will be able to show the extra resources that are going towards fighting crime.

My hon. Friend represents the interests of his constituency with great determination, and he pointed to some of the increases in investment, housing and policing that the White Paper includes.

Mr. David Trimble (Upper Bann): The Chancellor announced an increase of £1.2 billion in three years' time in Northern Ireland. Although we naturally welcome that, I understand that it includes several adjustments, some of which are technical, and the right hon. Gentleman will appreciate that we shall therefore suspend judgment on the detail until we have had an opportunity to study it.

The Chancellor knows that we inherited a pattern of expenditure in Northern Ireland that meant significant underinvestment in public utilities. We need and welcome his continued support for our efforts to achieve change and reform.

At the beginning of his speech, the Chancellor said that he hoped to provide for more doctors, nurses and police officers. He referred to funding for the Northern Ireland Office and said that the Government were providing resources for the ongoing recruitment programme of policemen and the establishment of a new training college. We are more than 500 officers short in the full-time establishment, and the number is dropping. Yet there is a serious problem of maintaining law and order and security in Northern Ireland. Will the resources that have been provided fully fund the additional officers that we need to reach the modest establishment targets that Patten set? Will the extra resources fully fund the new police training college?

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