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Comprehensive Spending Review

My Lords, for the Opposition to describe as a gamble all that we have done in a radical spending review seems incredible. Whey they were in government, they put more and more money on the table, doubled their bets and got credit until the music stopped. We were then left with the largest budget deficit in peacetime history. Now they have the gall to come here and say that what we are doing to put order back into the public finances is a gamble. It was absolutely unavoidable that we had to clear up the mess that we were left with. The overwhelming probability, in the commentaries that have continued to be published since the Budget, is that the plan will deliver what my right honourable friend the Chancellor said it would deliver. The noble Lord talked about unemployment. As I have made clear, the independent estimates of the Office for Budget Responsibility forecast a reduction over four years of 490,000 employees in the public sector. However, the same OBR forecast done at the time of the Budget said that, in every year of the forecast period, total employment in the country would rise and unemployment would go down. To put that into perspective, it is worth remembering that in the last consolidation of national finances in the wake of the recession of the early 1990s, between 1992 and 1997, 690,000 jobs were cut from the government workforce, but they were more than absorbed by the increase of 1.7 million in private sector jobs. That has been done before under a Conservative Government and will be done again. I begin to feel my age in this House when my old speeches are read back to me. It is very good and useful that the noble Lord reminds us of exactly what we said we would do and have done, which is to combine the necessary retrenchment with radical reform of how the public sector goes about its business. The combination of saving hard-working taxpayers their money with introducing radical reform is nowhere better demonstrated than in the welfare arena. The move over two Parliaments to a universal credit system is the most radical change in welfare for many decades. The noble Lord asked me who would pay for that change and all the other changes. The tables are all there at the back of the document explaining that the top quintile of the population will bear the largest share of the burden. There the noble Lord will find tables and analysis, which the previous Government did not care to show the nation in any spending review. However, I repeat that those who can afford to bear the greatest burden will pay for the change. I am grateful to the noble Lord for his slightly back-handed compliments on science, although I will take them as well meant. He clearly appreciates that the effort we have made on investment in science and wider infrastructure is absolutely critical to the medium-term growth of the economy. That is why we have maintained the science base in cash terms. I do not know whether, out of the science expenditure, we can provide calculators to noble Lords so that they can make calculations from percentages to money terms and so on, but perhaps that is something that those looking at procedures can look at. The question on social housing gives me an opportunity to draw attention to how we can deliver so much more if we apply decent disciplines to public expenditure. We will deliver 150,000 new units of social housing in the next four years at a cost of £4.4 billion. In the previous four years, the previous Government built 170,000 new homes at a cost of £11 billion—another indication of the sort of waste that is of the past. Coming back to the big questions of growth, which are absolutely critical, I know that the OBR, international forecasters and forecasters from the City are all forecasting continued growth this year, sustained and rising for the next few years. In the second quarter of this year, we had growth of 1.2 per cent and we had new jobs created in the first quarter—