Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 1:52 pm on 17 March 2005.

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Photo of Alistair Darling Alistair Darling The Secretary of State for Scotland, The Secretary of State for Transport 1:52, 17 March 2005

My hon. Friend makes two points. The announcement yesterday of our proposals to help pensioners is fairer, better and benefits far more of them. What is more, if the measures are put in place and carried through, as we fully intend them to be, pensioners will know that, in addition to the £200 winter fuel payment, there will also be £200 by way of the council tax rebate. We have a clear record on that over the past few years. He is right to say that the Tory record on helping pensioners is patchy and, in some cases, worse than that.

We have been retuning to the same point on and off. When the shadow Chancellor says:

"I fully accept that holding programme spending within departmental expenditure limits other than the NHS and schools to a zero increase for the first two years and to what amounts to a zero real terms increase thereafter is a tough constraint", we have to wonder how, at the same time, Conservative spokesmen can say that they will spend money here, there and everywhere—leaving aside the spending commitments that we know about. As I said, the shadow Chancellor said last Sunday that the difference between us was not small, as the hon. Member for Havant tried to say, but vast. If it is vast, that implies he knows that it will have some effect.

The shadow Defence Secretary has expressed concern about some of the payments. Others have described them as "painful", with regard to getting rid of the new deal, and, last November, as "tough." They cannot have it both ways. Either the reductions do not matter, as the Conservatives try to pretend, or they do. The truth is, as anyone who has ever looked at the consequences of such things knows, if expenditure is frozen, it is necessary to cut back from day one. That is the problem facing the Conservatives, which is probably why so many of them run away from the policies when we remind them of them.

Time and time again, the shadow Chancellor has said that he intends to hold down spending, resulting in—it is worth spelling this out so that people understand it—a reduction of £7.5 billion in 2006–07, followed by a reduction of £16 billion, £22 billion and £27.5 billion, rising to a reduction of £35 billion. No one is going to tell me that that would not make a difference.

As Secretary of State for Transport, I know that, if a Chancellor came to me and said that our expenditure was to be frozen, steps would have to be taken immediately to start laying people off or cutting programme expenditure. It is disingenuous for the Conservatives to suggest that their policy somehow does not matter. One wonders why, as recently as Sunday—surely the policy must still be in force—the shadow Chancellor was able to describe the reductions as vast. How does that square with what the hon. Member for Havant said today? We should be grateful to him, because he confirmed that the difference is £35 billion, which some Conservatives are trying to deny. In addition, the Conservatives have uncosted commitments of about £15 billion. It would be interesting to take a tour around the country to discover what they would do. Presumably those commitments would have to be paid for by more cuts in expenditure, but no one should be in any doubt that they would make a big difference.