By making the hard choices to save money in areas such as welfare, this Government have been able both to reduce the deficit and to increase capital spending on the infrastructure that is vital to our economic future. That is funding more roads and rail, and faster broadband, than in the years of the previous Government, when money was wasted. Indeed, public investment as a percentage of gross domestic product is higher on average in this Parliament than under the previous Government.
I thank my right hon. Friend for his commitment to upgrading our infrastructure, which was so woefully neglected in Labour’s 13 years of waste. In particular, I welcome the £5.5 billion in the autumn statement for science, roads and free schools. We will never build a 21st-century economy on 19th-century infrastructure. Given the pressure on public finances, does he agree that we may need to be bold in unlocking new models in private investment? I am thinking particularly of mutual and local investment such as the tax increment financing that has financed so many American cities.
I agree with my hon. Friend. In East Anglia, where his constituency is, we have invested more than £280 million in life sciences, and are providing infrastructure by, for example, upgrading the A11. He is completely right that we should look at new forms of financing. We have introduced tax increment financing, as he suggests. From April this year, all authorities will, within prudential limits, have unfettered access to standard tax increment financing.
Is the Chancellor aware that Mr John Cridland of the CBI said yesterday that the Government have a national infrastructure plan but were just incompetent at delivering it? That incompetence, which characterises the Government, is leading to a situation in which the Government will have achieved, by the end of this Parliament, about half the level of national infrastructure investment of 2008, which will cripple the competitiveness of the British economy. What is the Chancellor going to do about it?
It is an inconvenient truth to the hon. Gentleman that public investment as a percentage of GDP is higher on average in this Parliament than under the entire last Labour Government. That is because this Government are making the difficult choices on welfare,
which Labour Members oppose, to save money and reduce the deficit, and to spend more, for example, on roads than they did during their period in office. That is the right priority for the taxpayer.
Can the Chancellor confirm that Labour’s last Budget planned to cut capital spending by 50%?
Yes I can. Again, it is an inconvenient truth that we are spending billions of pounds more on capital spending than in the Budget that half of them opposite, who were in Parliament before the last election, voted for. We are making those choices: they oppose everything because they have nothing to offer in this place.
We are spending more on capital than the plan set out by my predecessor, Mr Darling—the plan that the shadow Chancellor voted for. We have increased capital spending in the 2010 spending review and increased it in autumn statements since. That is why we are spending more money on roads, and it is completely hypocritical for the Labour party to complain about capital spending cuts that would have been deeper if they had stayed in office.
It is simply not correct to say that the Government have matched the plans of my right hon. Friend the Member for Edinburgh South West. The Office for Budget Responsibility says that in the first three years this Government are spending £12.8 billion less on infrastructure than the plans that they inherited. It is £6.7 billion lower in this year alone. But if the Chancellor and Deputy Prime Minister are now so concerned about the shrinking economy, why do they not listen to the advice the IMF gave them last week and use the Budget in March to rethink their failed economic plan?
I do not think that the hon. Lady is being completely straight with the House about the numbers she is using—[Hon. Members: “Withdraw.”]
Order. Hon. Members may leave this to me. The Chancellor is very versatile in his use of language and he can rephrase that. No Member would be other than straight with the House. He should withdraw that term and use another, and I feel sure that he will do so.
Of course I withdraw and would simply say that the hon. Lady has been very creative in the use of the numbers that she has put before the House. The number she is using is the amount of money that Labour was spending on capital before the general election, but it set out plans to cut capital after the general election. We have exceeded those plans, and it is
completely hypocritical for the Labour party to claim that it would have spent more on capital when it clearly would not have.