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"In the economic cycles of the past 30 years, the current budget deficits averaged £109 billion, the national debt doubled and rose to 44 per cent of national income in 1997 and stop-go in the economy meant stop-go in the public finances.
"So our first task was to create stability and sustainable public finances. Having set clear fiscal rules over the economic cycle--a current budget in balance, borrowing only to invest within prudent and cautious limits--today we not only have low inflation and stable growth but year-on-year current budget surpluses and debt falling below 40 per cent of national income; indeed, debt being repaid this year and next.
"Our second task was to encourage the work ethic and secure rising employment. Today, with the assistance of the New Deal, unemployment is at its lowest for 20 years and almost 28 million people, more people than ever before, are in work in our country today.
"Now, building on the foundation of stability and strengthened economic fundamentals, we can move to the next stage in creating a better future: to make good the damage done by the legacy of decades of under-investment across our public services; and to realise long-term national goals that we have set for a decade, to close the productivity gap with our competitors, to deliver and sustain full employment, to secure higher education for a majority of our young people, to halve and then abolish child poverty and to build strong public services as we create a Britain where there is security and opportunity not just for a few but for everyone.
"It is only by investment in education, in science and in the future of our children that we can equip ourselves for future economic success and ensure that there is opportunity for all. It is only by investing in health, transport, the environment and in law and order that we can ensure a more productive economy and security for all.
"And just as stability and economic strength make possible investment, so, too, new investment reinforces stability and creates longer-term economic strength. So, while we will raise current expenditure only in line with our neutral view of trend growth--by 2.5 per cent a year--we propose to tackle the long-term neglect of investment in our country with a step change in capital investment for education, science, health, policing and in our transport and infrastructure.
"As I announced in the Budget, net capital investment will more than double, rising from £7 billion this year to £19 billion by 2004, within a ceiling for public investment of 1.8 per cent of national income, as we renew our public services.
"The second conclusion of our spending review is that it is by tying new resources to reform and results, and by locking in incentives, penalties, inspection and information that we ensure new investment goes to front line services: in secondary as well as in primary schools, new targets for literacy and numeracy and IT; in hospitals, new systems of inspection; in law and order, reforms to criminal justice; in defence, implementing the next stage of the Strategic Defence Review; with local government, new public service agreements; and in transport, a new partnership between private and public sectors. At every stage money will be tied to output and performance.
"Let me give full details of the financial background. In the Budget I confirmed the current surpluses from 2000 onwards would be £14 billion, 16, 13, 8 and £8 billion. My Budget also confirmed net borrowing will be minus 6.5, minus 5, plus 3, plus 11, plus £13 billion, lower borrowing in every year than in any year of the previous Parliament.
"I said that, as a share of national income, debt will be 35 per cent, 34, 33, 33, 33 and thus even with our programme of public investment we meet both our fiscal rules and do so even on the most cautious case and a cautious view of trend growth at 2.25 per cent.
"In accordance with the code of fiscal stability, I will publish the second fiscal forecasts of the year in the autumn. But I can already report that since the Budget the fiscal position has further strengthened. For the year ending March 2000, the current surplus is healthier than originally forecast at the time of the Budget--not £17.1 billion, but £20.4 billion.
"Debt as a share of GDP has been reduced even more, from 37.1 to 36.8 per cent. Indeed, I will use a further underspend of £2.5 billion in annually managed expenditure to repay debt. Two billion pounds in departmental expenditure can be carried forward. However, on grounds of prudence, I have decided to allow a carry forward of only £1.5 billion and to allow spending of only half of that this year and half next year--and to allocate the remaining sum to repay more debt.
"It is only because we have put the public finances on a sustainable footing that I can raise spending today. It is this same discipline that allows me to inform the House that this year we have repaid £6.2 billion more debt than the £11.9 billion originally planned--in total, a debt repayment of £18.1 billion, the largest repayment of debt in any year since the war.
"We have not and will not relax our discipline. So I have three policy announcements to underpin the strength of the public finances. Further limited sales of spectrum will take place by the end of 2001. We shall not repeat the mistakes of the North Sea oil windfall and of the privatisation sales where receipts were immediately used up in current spending. I can confirm that all the capital proceeds will--as with the £22 billion from the first sale--go to further reduce the burden of debt.
"As debt is reduced, so, too, are debt interest payments. The first spectrum sale alone will reduce the bill for debt interest by a further £1 billion a year by 2003-4, money that--as I shall confirm later this afternoon--will, year after year, go directly to improving public services.
"Secondly, departments and authorities will make asset and property sales of £4 billion a year over the next three years--4 billion a year released by realising unproductive assets we do not need to fund service improvements we do need. Because money is tied to modernisation, the new public service agreements signed with departments--and for the first time with local government--will not only specify agreed outcomes but precise timetables for making necessary reforms.
"I can tell the House, as a result of the fall in the share of administration costs in total government spending, new money makes possible a substantial shift in spending to the front line services--to recruit more nurses, doctors, teachers, classroom assistants, and police, more staff in our front line services.
"With the success of the New Deal, the bills for social and economic failure are now £3.5 billion lower, enabling us to transfer £3.5 billion each year from paying unemployment benefits to funding public services.
"With this improvement comes a radical shift in the composition of public spending. Our promise was to reduce the costs of failure--the bills for unemployment and debt interest--in order to reallocate money to the key public services.
"In the two decades from 1979 until 1997, rising debt interest and unemployment and social security accounted for 42 per cent of all extra public spending and that meant that 42 pence in every additional pound spent was not available to the key public services.
"In the coming three years, unemployment, social security and debt interest payments will account for not 42 per cent but now only 17 per cent of extra public spending, even as we direct more money to child benefit and the minimum income guarantee. That leaves around 80 per cent of new money for health, education, transport, policing and other public services--extra resources now available to us, not at the expense of our prudence, but because of our prudence.
"So within our fiscal rules and within the envelope I set in the Budget and have strictly adhered to, I can announce that spending on public services--what is called the departmental expenditure limit--is able to rise from £195 billion this year and our previously planned £203 billion next year to £212.1 billion and then to £229 billion in 2002-3 to £246 billion in 2003-4. By 2004 an extra £43 billion a year will be allocated to front line services. Sustained improvements in public services are now made possible because with stability and strengthened economic fundamentals, and lower debt interest and lower unemployment, we have sustained improvements in our public finances.
"I now turn 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--to fund new equipment and to increase the mobility and efficiency of our front line forces--defence spending, which has been failing in real terms every year since the end of the Cold War, will now increase in real terms. The allocations are £23.6 billion next year rising to £25 billion in 2003-4.
"The rise in the Foreign Office budget from £1.2 billion next year to £1.32 billion in 2003-4 will not only finance the proper representation and promotion of Britain abroad but also the Foreign Secretary is announcing today that the British Council will receive extra funds and the budget for the BBC World Service will rise substantially from £174 million this year to £180 million next year, to £210 million by the end of the period to achieve our new target of 153 million World Service listeners by 2002.
"Because we take seriously our international responsibilities to the environment, the Government are announcing today a special £85 million fund to assist nuclear clean up at Chernobyl. The international community's clearest duty and
"Our international aid budget will rise from £2.8 billion this year to £3.1 billion next year, then £3.3 billion and £3.6 billion by 2004, a real terms rise of 6.2 per cent a year, in contrast to the falling share of national income devoted to overseas aid from 1979 to 1997. There is a rising share of national income today and in the future, as we honour in full our commitment to debt relief and our obligation to the poorest countries of the world.
"I turn to our second set of decisions, new investment to build stronger communities. The Home Office budget will rise from £8.2 billion this year to £9.6 billion next year, to £10.3 billion the year after, to £10.6 billion in 2003-4, an annual rise in real terms averaging 6.4 per cent a year. Tomorrow the Home Secretary will set out both his targets and how this allocation will be spent.
"To implement fully the Good Friday agreement, an extra £316 million over three years will help fund the modernisation of policing and criminal justice in Northern Ireland, and in this way help underpin peace and future prosperity.
"Every community in the land is weakened by the evil of drugs. In return for challenging new targets to cut drug related reoffending by 50 per cent over the decade and to treat twice as many addicts through the new National Treatment Agency, the new anti-drugs budget will be set at £870 million in 2001-2 and then rise to £931 million and £996 million by 2004, an average annual real growth rate of 10 per cent.
"Strengthening our local communities involves a new partnership with local government based on increased investment and new targets. The three year settlement for local government--an annual real terms rise of 3 per cent over and above inflation--will be set out in full by the Minister for Local Government. Ministers in Scotland, Wales and Northern Ireland will make related announcements.
"Local and national government need to work even more closely in a new partnership for reform and improvement in our poorest areas. For decades our whole country has been scarred by deep and persistent deprivation and under-achievement in high unemployment communities.
"While much previous spending has been directed to dealing with the consequences of economic and social failure, it is time now to invest in tackling the causes of failure--poor school results, poorer standards of public health and low levels of economic activity. Today our poorest council estates suffer unemployment four times and burglary rates three times the national average, with mortality rates 30 per cent higher. These unjustifiable and divisive inequalities cannot be tolerated. Both government and communities must
"So we will not only extend the New Deal for communities but strengthen the institutions--from our schools to our health centres--on which communities depend. In return for local public service agreements that require new minimum standards in school attainment, public health, law and order and job creation, a new neighbourhood renewal fund will provide, by 2004, new resources worth £400 million a year.
"In this spending round, housing--and our objective of decent affordable housing for all--will receive the priority it deserves and resources it needs--an additional £1.6 billion of new investment by 2004, a real terms rise averaging 12 per cent a year.
"Across the social sector, we will ensure that half a million more houses will be modernised or repaired, part of a 10-year plan to eliminate all substandard housing. And as we implement key recommendations of the Rogers report, reclaimed brownfield sites will account for 60 per cent of all new housing, creating thousands of new construction jobs.
"Investment in the future must mean investment in a cleaner environment. To meet our climate change commitments the Environment Minister will announce how new resources will promote emissions trading and energy efficiency in Britain's homes, and there will be further announcements on the use of renewable energy and recycling by local authorities.
"In rural communities the new rural transport fund has extended the rural network with 2000 new or improved bus services. And the rural transport fund will be increased from an annual allocation of £60 million to £95 million. And there will be an announcement of new finance available for maintaining the Post Office network in both rural and urban areas.
"And as farming restructures and deals with BSE and meets challenging targets to move from the old farm production subsidies to the new environmental improvement payments, the agriculture budget, including the Intervention Board, will increase from £1 billion this year to £1.35 billion by 2004, an average annual real terms rise of 6 per cent. And the Food Standards Agency will see its budget rise from £87 million this year to £111 million by 2004.
"Extending access, particularly for our young people, to the arts and to sport will strength every community. With a 4.3 per cent annual real terms rise in the budget of the Department of Culture, there will be significant improved funding for the arts, and the Secretary of State will give details of new funding to encourage children to use our libraries, museums and arts and to encourage sports in schools and in our communities.
"Strengthening communities must involve strengthening our social services and our health service. Our NHS plans will be announced next week. There will also be a major package of investment in services for elderly people--including the Government's response to the Royal Commission on Long Term Care. The Health Secretary will announce the detail of this and other allocations from the health and social services budget next week.
"The strong civic society we seek is built not by rights alone but by rights and responsibilities. So we will match our Budget tax reliefs to encourage the giving of money with new measures today to encourage the giving of time, extra resources of £60 million by 2003-2004, with a clear aim--to encourage 1 million more of our citizens as volunteers in community service in our country.
"I turn now to the investment we must make in our economic future. Britain has great strengths--the best place in Europe to do business, with world class companies in science and technology--but to build for the future we must put in place the long-term investment which is the precondition of a strong economy and of bridging the productivity gap with our competitors and avoid the short-termism of the past.
"Working with business, the role of modern government is not to subsidise loss-makers or to attempt to pick winners. The new role of government is to invest in science and innovation, to promote competition, small business development and enterprise for all, to encourage balanced regional development and meet the pressing needs of transport and infrastructure and most of all to invest in the greatest driver of prosperity--education and skills.
"First, investment in science. With our investment in a £1 billion public private partnership with Wellcome to re-equip university science and extra resources to support pioneering medical research, we will raise the science budget by 5.4 per cent a year in real terms.
"And to ensure invention in Britain leads to manufacturing in Britain and jobs in Britain, the Secretary of Industry will announce new resources for the University Challenge fund that commercialises inventions and for university-based regional enterprise centres.
"Britain's small businesses are the backbone of our local economies. And to offer new services businesses have themselves requested, the budget of the new Small Business Service will rise substantially from £197 million this year to £277 million by 2004. This will include a national Internet service offering comprehensive business advice and a consultancy
"The newest and most decisive challenge in the new century demanding higher levels of investment is to master and lead in the new information technologies. To make Britain best for electronic training and to bridge the growing digital divide, the review has agreed a three-year programme of rapidly rising investment in our schools and our communities and a new fund that the Prime Minister will announce to ensure that by 2005 Britain will have all government services offered on line.
"To secure balanced regional development, regional development agencies will receive new resources, their budgets increased by £500 million a year by 2003-2004. These will not only be new funds but new flexibilities they have themselves identified: in the North West promoting innovation and research; in the North East, increasing entrepreneurship; in Yorkshire and Humberside, small business development; in the East Midlands, information and communications technology; in the West Midlands, modern manufacturing; in the South East and South West, as in Scotland, Wales and Northern Ireland, with their devolved decision-making, the promotion of clusters of growth; in every region, new support for skills, employment and for schools and colleges to promote enterprise open to all.
"The overall settlement for Scotland provides for an increase of £3.4 billion a year by 2003-2004, an annual real terms rise of 4.4 per cent. A separate announcement will be made by the Scottish Executive.
"For the Objective 1 areas in the United Kingdom--in Wales, Cornwall, Merseyside, south Yorkshire--and for Objective 2 and 3 areas, I am announcing a new approach that will raise their levels of investment. Within our departmental allocations we are making today the Government will ensure funding for the European share of Objective 1, 2 and 3 projects. For EU structural funds this is estimated to total £4.2 billion over three years, including an estimated total of £600 million for new Objective 1 programmes in English regions.
"The settlement increases funding for Wales by a total of 5.4 per cent a year in real terms and allows for match funding--and includes a special allocation to ensure funding of the European share of Wales' Objective 1 needs, an allocation to Wales of £80 million, £90 million, £102 million over the next three years. I am also transferring management of the European Social Fund allocations for Wales of £149 million over the next three years to the Welsh Assembly.
"It is because of the importance to all regions of modern transport and infrastructure that we will now make a step change in investment in public transport. In the Budget we removed the automatic fuel escalator and extra money was allocated to roads and public transport this year. Now we are able to raise spending on roads and public transport by significant extra sums to meet the needs of business and the public, from £4.9 billion this year to £6 billion next year, then to £7.4 billion and £9.1 billion in 2003-2004, a real terms rise of 20 per cent a year to 2004.
"Details of the targets to improve rail and bus services and to cut road congestion and of the allocation of funds will be set out in the ten-year plan to be published by the Deputy Prime Minister on Thursday.
"The modern economy can succeed only when it uses all the talent of all its people. Any potential squandered is a resource denied to the country's future. In this review we allocate new funds to advance our goal of full employment. For 70,000 employers, nearly 500,000 young people and for Britain, which has seen long-term youth unemployment fall by 70 per cent, the New Deal has been succeeding, a central building block for our policy of full employment. So long-term youth unemployment, which rose to 500,000 in the 1980s, is 50,000 today.
"The windfall levy raised over £5 billion, with £1.6 billion allocated to schools and £3.5 billion to employment creation. Because the New Deal has been even more successful than forecast, with more getting back to work more quickly, there is an underspend, enabling us to fund the New Deal well into the next Parliament and to transform what started as the New Deal for the young unemployed into a permanent deal for all long-term unemployed.
"Having helped 500,000 on the New Deal, we now set plans to help the next 500,000. Next year and until 2003, I expect £1.7 billion to be available from the windfall levy to do more to coach the hard-to-employ young unemployed and systematically to create new opportunities for our long-term unemployed, nearly 1 million single parents and thousands of disabled men and women who want to work.
"To bring both childcare and employment within the reach of more parents, childcare investment will rise from £66 million this year to £200 million by 2003-04, as we deliver our national childcare strategy.
"Because of our success in cutting unemployment, social security spending, which grew by 4 per cent a year in the previous Parliament, is growing by 1.5 per cent a year over the next three years and the budget for unemployment-related benefits is falling. To make further social security savings by tackling fraud and error, we are announcing new investment in staff and technology. Having cut errors in income support claims by half,
"I turn now to investment to ensure that all children have the best start in life. Today's children will be tomorrow's doctors, scientists, engineers and nurses--our future workforce. By investing in children, we are investing in our country's future. Having invested £7 billion a year more in families--raising child benefit by 35 per cent, guaranteeing a minimum family income under the working families' tax credit and from next April the new children's tax credit, giving the typical family £442 a year--it is time to take further steps.
"The war against child poverty requires not only additional cash but the support and encouragement of all forces of care and compassion in every community. It can be won only by the combined efforts of parents and private, voluntary, charitable and public sectors working together. So in a unique initiative, and after consultations with charities and voluntary organisations, we will create a national children's fund with a budget over three years totalling £450 million to help children and young people at risk. The children's fund will work with national children's charities and local community organisations--secular and faith based--and support those dedicated staff and committed volunteers who offer one-to-one help to young people, and parents, at risk. Seventy million pounds will be allocated to a network of 50 local and regional children's funds.
"I turn to investment in education. With the funds the Secretary of State for Education allocated from the first spending review he has made reforms in education, ensuring nursery education for every four year-old, cut class sizes for five to seven year-olds, raised literary and numeracy standards for 11 year-olds by six and 10 percentage points and reformed and expanded higher and further education. Education qualifications are, in the modern world, the surest route to opportunity and security for all.
"All children should be ready to learn when they reach school. From the first spending review came Sure Start, now lifting 50,000 children and their parents out of poverty. In this second review, and tied to targets for improving child development and parental responsibility, we will, by 2004, and with a budget of £500 million, expand the number of children helped to 345,000. And with nursery places already increasing from 200,000 in 1997 to 400,000 in 2002, the Secretary of State for Education and Employment will announce funds for the next stage in the expansion of nursery education.
"Having improved standards in our primary schools, the next task is now to raise standards as decisively in the secondary schools. The expansion of resources which the Secretary of State for Education and Employment will announce for all schools is designed to back up reform and to bring about radical improvement within the
"To raise Britain's appallingly low school staying-on rate, we are setting aside £150 million a year for education maintenance allowances worth up to £40 a week. Our new and challenging target is by 2004, 80,000 more young 16 to 18 year-olds in education and by age 21 nearly 60 per cent of young people having left school or college with A-levels or their equivalent.
"Under the New Deal for Schools, 17,000 of our schools will have had some improvement, modernisation or renovation by 2002, and every one of our 32,000 schools will be linked to the Internet, with the objective of, by 2004, 500,000 more computers in our schools. By 2010 we want the majority of young people to go on to higher education. The Secretary of State is today allocating £100 million extra to higher education in 2001-02, making a 4.6 per cent real terms increase in total. The review provides further finance that will raise the numbers in part-time and full-time higher and further education towards our goal of 50 per cent.
"State school pupils secure two-thirds of the top A-level qualifications but only half the places in some of our leading universities. To bridge this gap the Secretary of State for Education is today setting a new objective to improve access. The Higher Education Funding Council will provide financial help for universities submitting plans for year-on-year improvements in widening access. Two million adults have a reading age of seven or less. Adult illiteracy is not just a failure of our society but, as business leaders round the country have told me, an economic inefficiency that cannot any longer be tolerated. In the coming weeks, the Secretary of State for Education will announce the new resources provided to tackle these barriers to opportunity and earnings.
"The best education for all, from early learning to lifetime learning, is not only a time-honoured social ideal but in today's world an absolute economic necessity. That is why we have decided to make increased investment in education the priority of this year's review and to back sustained long-term reform with a sustained increase in resources. In the Budget I was able to allocate new resources to the NHS, amounting to a rise of 6.1 per cent a year in real terms over four years to 2004. I was also able to allocate an additional £1 billion to UK education this year. Today, in return for new targets for improved standards, we can allocate further resources for UK education for the next three years.
"Under the previous government, UK education spending rose by an average of only 1.5 per cent a year in real terms. Over the next three years, UK education spending will rise by 5.4 per cent a year in real terms. Spending will rise from last year's £40.6
"I have one further announcement. In March the Secretary of State for Education made special payments direct to headteachers for books and equipment ranging from £3,000 to £9,000 for primary schools and from £30,000 to £50,000 for secondary schools--£290 million in total that went direct to the headteacher, to be spent by the school for use in the classroom. The Government have decided to continue this innovation. But next April the Education Secretary will allocate to our headteachers not £290 million but £540 million. As a result, head teachers in every one of our smaller primary schools will next year receive not £3,000, but a payment of £6,000; the larger primary schools, not £9,000, but a payment of £20,000. For the smaller secondary schools, there will now be payments of £50,000, rising, for the larger secondary schools, to payments of £70,000. These payments will now be made not only for one year, but for every year until 2004.
"So we have made our choice. It is now for those who oppose our spending plans to state clearly where their cuts would fall. The Government have been prudent for a purpose. Our choice is stability, employment and sustained long-term investment now and into the next Parliament to create a Britain of security and opportunity for all. I commend the Statement to the House". My Lords, that concludes the Statement.
Lord Saatchi: My Lords, wow! That was £43 billion of extra spending. So many billions, so many noughts; is it not marvellous? However, perhaps a question then arises: if it is so marvellous, why is not a grateful nation falling at the Government's feet in gratitude? Why do people appear not to be happy? Why does Gallup's "feelgood factor" stand at minus 15? Why has the Government's lead in the polls halved? Why is the Prime Minister's satisfaction rating now negative? Where is the gratitude?
There appear to be three possible reasons for the mysterious lack of gratitude. I should like to consider them. First, it may be that people just do not believe the figures. Could it be that, as was stated in The Times:
Could it be because the Government said that they would raise petrol tax and pensions by the rate of inflation? Only later did people find out that the Government had used the historic rate of inflation for pensions--up 1.1 per cent--but the forecast rate for petrol tax--up 3.3 per cent.
We should not be so cynical. Let us take the figures at face value. That could bring us to a second possible solution to the case of the missing gratitude. Could it be that, even if people do believe the figures, they may be sophisticated enough to ask themselves: where is all this money coming from? Is it the strong economy? It is not that, because our economy is now growing more slowly than that of either France or Germany. On the plans announced today, government spending will grow by 3.3 per cent per annum, but the UK economy will grow by only around 2 per cent per annum. Thus, on today's spending plans, the Government are opening up a dangerous gap between government expenditure and national income.
Noble Lords will recall the dictum: annual income £20, annual expenditure £19-19s-6d, result--happiness; annual income £20, annual expenditure £20-6d, result--misery. Could people have worked out that, to fill the "misery gap", taxes are rising by the equivalent of 5.3p on the basic rate of income tax? Of course the Government do not put it that way. They rely instead on so-called "fiscal drag", a delightfully invisible aspect--from the Treasury's point of view--of our complex tax system, whereby tax allowances rise more slowly than earnings. Tax receipts to the Government rise faster than the growth of GDP. This year, as was the case last year, the Government's tax receipts are rising by 9 per cent, three times faster than the growth in GDP and three times faster than earnings. That is how the miracle to which the Minister referred--that of the allegedly "strong public finances"--is in fact being delivered. This Comprehensive Spending Review is ill named. It should be called the "Comprehensive Taxing Review".
However, let us once again be generous. Let us say that one does believe the figures and understand that the additional money has to come from tax. Because one is a public-spirited soul in a post-materialist age, one accepts that. Then a third question arises: what are they actually doing with all this money? Surely people can see that the money is not creating shorter hospital waiting lists, better cancer survival rates, more policemen and fewer violent crimes. What are the Government doing with the money?
For the first time since 1979, employment in the public sector is on the increase. According to new figures I have today received from the Office for National Statistics, the number of state jobs rose by 44,000 in 1999. As I have said, that represents the first increase since 1979.
How marvellous that would be if those jobs all represented more policemen, doctors or nurses? However, we see that they are instead, "dignity at work consultants" at salaries of £28,000 a year, or "training zone trainer administrators" at £22,000 a year, or "multi-agency facilitator team leaders" at £24,000 a year. The reason why people are not falling on the floor with gratitude is because they do not believe the spending figures, they are not inclined to pay more in taxes for them and even if they were, they cannot accept more tax with results that are imperceptible to the naked eye. That is a triple whammy from which I cannot see how the Government will recover.
Is there any way in which Members of your Lordships' House could help the Minister in his plight? Well, there is one body in the land that could help to restore some credibility to the presentation of the Government's finances, but sadly, that body is excluded from the process. I refer, of course, to your Lordships' House.
I am told that this short debate will last for around 40 minutes, or perhaps a little longer. On that basis, that means that your Lordships' House will be passing judgment at a rate of £1 billion a minute. Because of the expertise and experience represented on all sides of your Lordships' House, this House is one of the bodies in our constitution best equipped to deal with the details of financial matters. However, it is not called upon to do so. Our debate today will probably last for less than an hour. The 572 pages contained in two volumes of the Finance Bill 2000 will be dealt with in this House in two hours or so at 11 a.m. on the last Friday of this Session.
Why is that? Is it not because the Parliament Act 1911 deprived your Lordships' House of the right to scrutinise money Bills? The then government's express argument for that Act was that the House of Lords was undemocratic and illegitimate, because it was packed with hereditary Peers. Did not the House of Lords Act 1999 remove that impediment? Does not the Leader of your Lordships' House say that our new House is more democratic, more legitimate and more authoritative? In the light of that, is it not perhaps time to revisit the relevance of the Parliament Act 1911 to today's House of Lords?
Lord Taverne: My Lords, one thing that is clear from the Minister's marathon Statement is that we should revise the procedures of the House. It should be possible for a Minister to say, "We have all read the Statement. Let's read it into the record. Any questions?" That would save an awful lot of time and would save the Minister an awful lot of breath.
It is fair to acknowledge that there are many good things about the Statement. Let us start with them. The increases in public expenditure are welcome. That should--not necessarily, but it should--make this country a more civilised society. Among the many particular items that we welcome, I wish to mention the increase in expenditure on the World Service, the increase in the science budget, the increase in overseas aid and the support given to the Good Friday Agreement.
However, we have one fundamental criticism of the Statement and government policy. The Chancellor may have avoided stop-go in overall economic management but he has not avoided stop-go in the management of public expenditure. We have had stop-go in public expenditure in spades.
Last year, public expenditure was 38.3 per cent of gross domestic product, which is a 35-year low. The record of the growth of public expenditure over the whole Parliament will not be particularly impressive. That low figure might please the Conservatives but it is reflected in the appalling state of many of our public services. Stop-go is the reason why the Government have failed to achieve smaller classes, with an average size of 25. It is the reason for the shortage of nurses and hospital beds and for longer waiting lists. It is also the reason for the Government's failure so far to realise their promise to increase the size of the police force. What has increased, of course, is the prison population, because the Home Secretary seems determined to follow the policy of his predecessor and lock up just about anyone in sight whom he can lay his hands on. That is not the right way to deal with crime and the causes of crime.
Stop-go in the management of public services leads to havoc in public services. We hope that we are now going to see an increase in the number of policemen, but a number of experienced policemen will leave and we will have new recruits instead. The police force as a whole will suffer. The same applies to nurses.
Perhaps the worst failure, which is not mentioned in the review, is on pensioners. For our relative wealth, our state pensioners are the worst-off in the European Union. My colleagues will return to that subject time after time.
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