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Government Capital Expenditure

Part of Opposition Day — [3rd Allotted Day] – in the House of Commons at 5:30 pm on 2nd February 2009.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 5:30 pm, 2nd February 2009

It is a pleasure to speak in this debate. The Liberal Democrats have proposed an interesting motion, which is very helpful to the House in one sense—it highlights an inconsistency in the Government's approach. We hear how the Government are engaging in a fiscal stimulus through public works and additional spending to help people out of the recession, but almost daily we read that public expenditure is being held back and that capital projects have been cut. A number of those points have been raised today by hon. Members, including by Dr. Cable.

The Minister, in a carefully worded response, stated that 250 further education college projects are under way and that there is some disappointment about what is going forward. However, it appears that there is a freeze on new projects, and that is the reality that Members are finding in their constituencies. It has not been made up—we are hearing about it, our constituents are telling us about it daily. We see frequent newspaper reports of PFI projects being put on hold. The Times tells us that more than 100 school and hospital projects are being delayed. The Government have announced that many of the proposals, such as the widening of the M25, are to be held back for budgetary reasons.

We know that there is a crisis in social housing. It is a long-standing fact that less social housing has been built in every year of this Labour Government than was built in every year under the last Conservative Government and that the number of households on local authority waiting lists for social housing has increased from 1 million to 1.8 million.

The Government say that they are trying to spend their way out of a recession, but in reality they faced the difficulty of the unsustainable nature of their public finances, and they are unable to deliver. I am grateful to the Liberal Democrats for highlighting that point. However, we are not entirely sympathetic with the Liberal Democrat policy that underlies the motion, which is to try to deal with the recession through expenditure on public works. I think that that was essentially what the hon. Member for Twickenham outlined.

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