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Budget Resolutions and Economic Situation

If the hon. Gentleman is saying that we should make it a priority to put money into tackling child poverty as resources become available in the years ahead, I completely agree with him, and I am sure that the shadow Chancellor will have heard his representations. But where are the Opposition on this issue? The policy chief of the Conservative party, the right hon. Member for West Dorset (Mr. Letwin), gave a surprising interview to The Daily Telegraph on 23 December—it positively interrupted my pre-Christmas present buying—in which he said:"““Of course inequality matters. Of course it should be an aim to narrow the gap between rich and poor””." He went on:"““It’s more than a matter of safety nets . . . We should redistribute money.””" So presumably the Conservatives support the measures that we have taken. In fact, the shadow Chancellor has never, to my knowledge, said anything positive about tax credits. Indeed, he has spent most of his time saying we should cut tax credits. Of course, tax credits alone will not solve the problem. Active labour market policies, Sure Start and greater educational opportunities matter as well. It is fine to have a policy review, as the Conservatives are doing, but I do not see how anyone who genuinely cares about poverty can say in advance—before their policy review concludes—that public spending must fall as a share of national income. How can they make that decision before the conclusion of their policy review, if they care about poverty? Finally, I want to talk about how we can match growing private affluence with a strong public realm. In 1958, in ““The Affluent Society””, J.K. Galbraith wrote about the coexistence of private affluence with public squalor. It surely must be an aim of one of the richest countries in the world to show that this is not inevitable, and to create a public realm of which we can be proud. The figures on schools investment given last week by my right hon. Friend the Chancellor are striking in that regard. Capital investment in schools was about £600 million in 1996–97, when the right hon. and learned Member for Rushcliffe was Chancellor; it has risen to £6 billion today, and it will rise to £8 billion by 2010–11. Let us be honest: that £600 million was nowhere near what was required to prevent the condition of our schools from getting worse, let alone to improve them. I believe that we can see the difference that higher capital spending is making in all our constituencies. This Budget opens important new fronts in the Government’s mission to rebuild the public realm. For example, I care a lot about the long-neglected issue of youth spaces, youth clubs and youth institutions. We will never succeed in our campaign for respect among young people unless we give them decent spaces to which they can go. That is why I very much welcome the plan for a 10-year strategy for youth services. Of course that strategy must involve the voluntary sector—something that the Conservatives care a lot about these days. It must also reform the youth service, and draw in resources from the private sector. However, it is simply folly to pretend that these services can be built without public investment. I give the Opposition credit for saying that they care about these issues, but I say in all honesty that if they will the ends, they must also will the means. Is not the Conservatives’ problem that, in 2006, their heads tell them that the philosophy of the Lawson Budget of 1988 is no longer what the public want, and that they must bury it, while their hearts tells them that they must not? Fifteen years after Margaret Thatcher went, they still do not know whether to bury Thatcherism or to praise it. These are the contradictions that we now see exposed in their response to the Budget. There are big questions to be answered about the condition of our country, about the challenges of globalisation, and about how to tackle poverty and strike the right balance between tax and spending. They are difficult questions, but last week my right hon. Friend set out a clear and principled course, and Labour Members can look forward to the arguments in the months and years ahead.