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The Economy and Welfare Reform

The Deputy Prime Minister says that at least they are still investing, but the amount has almost halved under his Government, and I do not see how he can be proud of that. If we want to stay ahead in the world we need to keep adding value to stay at the cutting edge as technology moves on. We need the best educated and best trained people in the world. The British people have the ability to do that, but they are being let down by this Government. According to Organisation for Economic Co-operation and Development figures, the UK education system under Labour has fallen from fourth to 11th place in the world for science, 7th to 11th place for reading, and eighth to 18th for maths. No one doubts that the Chancellor is spending a great deal of money. On his current plans, he will have increased the share of the nation’s income spent by the state by 5 per cent. He has always confused inputs with outputs, however. He should talk to the Minister for Pensions—formerly the Financial Secretary—who said:"““Too often a lot of money has been spent but very little seems to have been achieved””." He was spot-on when he said that. Four years ago, when the Chancellor turned on the public spending tap, he said:"““There will not be one penny more until we . . . make the reforms””." That was the moment when he could have brought about a transformation of our public services—he had the money and the majority; now both are running out. He only has himself to blame. Who in Government has opposed every minor reform that a succession of beleaguered Health and Education Secretaries have tried to push through? It has been the Chancellor of the Exchequer, the road block to reform in this Government. The challenge of the next five years is to build modern, reformed and diverse public services. We understand that. Even the Prime Minister, in his twilight years in Downing street, is coming to understand that. The insurmountable obstacle to meeting that challenge, however, is sitting in front of us on the Treasury Bench. That is the public services challenge. Then we have a pensions challenge. We welcome the new Secretary of State for Work and Pensions to his place. He has the task of sorting out the mess that the Chancellor of the Exchequer has created. It is a refreshing start that he makes no attempt to defend the £5 billion tax on pensions—the single most damaging thing that this Chancellor has done in office. We will also be interested to hear what the Secretary of State for Work and Pensions has to say about the Chancellor’s means-tested pension credit. Adair Turner said at the weekend:"““we have to stop the spread of means testing. It is a disincentive to save””." There was a time when the Chancellor would have agreed. Back in 1988, the Chancellor stood at this Dispatch Box in opposition, and condemned means-testing of pensioner benefits as the most serious Government assault so far mounted on the basic principles of Britain’s welfare state. Yet what has he done in office? He has extended the means test to half of all pensioners. The previous Secretary of State for Work and Pensions called the pension credit a medium-term solution, before it turned out that he was just a short-term solution. What is the Chancellor’s solution? Then there is the issue of compulsory pension saving. We welcome the new hon. Member for Normanton (Ed Balls) to this place. At last he emerges from the shadows, and we have both the Chancellor and his ““mini-me”” in the House. During the recent campaign, the hon. Member for Normanton said at a Labour party press conference—he remembers it well—that another election would have to take place before any compulsory saving was imposed. The new Secretary of State for Work and Pensions overruled him, however, saying the new hon. Member for Normanton was speaking only"““as a parliamentary candidate not as a spokesman””." Where does that leave the Chancellor? He said during the campaign:"““I don’t believe there could be legislation in this Parliament. It would have to be in a future Parliament.””" I suppose that he, too, was speaking as a parliamentary candidate and not as a spokesman. Would the Chancellor or the Secretary of State for Work and Pensions like to confirm their views on the matter? Could there be legislation on compulsion in this Parliament? I will take an intervention from either of them, or both of them—I think that they are sorting out the position as we speak. Let me quote:"““when Labour came to office we had one of the strongest pension provisions in Europe and now probably we have some of the weakest””." Those are the words of the first pensions Minister, the right hon. Member for Birkenhead (Mr. Field)—an epitaph to this Chancellor’s record in office.