Wednesday Volume 510 26 May 2010 No. 6 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Wednesday 26 May 2010 £5·00 © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 155 26 MAY 2010 Government Spending Cuts 156 cost reductions from the 70 major suppliers to government. House of Commons Some £600 million is being cut from the cost of quangos and at least £120 million will be saved through freezing Wednesday 26 May 2010 civil service recruitment. We will drive those and other savings through a new efficiency and reform group, The House met at half-past Eleven o’clock which will work with the Cabinet Office and draw on expertise within government. The shadow Chancellor PRAYERS will be pleased to learn that this will be funded from within existing budgets. This action is designed to send a shockwave through Departments to focus Ministers [MR SPEAKER in the Chair] and civil servants on whether spending in these areas is really a priority in the difficult times that we are now Government Spending Cuts facing. 11.33 am As well as reducing waste and the costs of government, we have started to scale back lower priority spending. Mr Alistair Darling (Edinburgh South West) (Lab) We have taken the tough decision to pass legislation to (Urgent Question): To ask the Chancellor of the Exchequer end child trust fund payments—that will save £320 million if he will set out the measures that will be implemented in 2010-11, with the figure rising to £520 million in across government to deliver the more than £6 billion of 2011-12. The House will be pleased to learn that, as in-year spending cuts announced earlier this week? part of the net savings, we will be reinvesting money to The Chief Secretary to the Treasury (Mr David Laws): provide respite breaks for disabled children. Mr Speaker, I am extremely grateful, both to you and to Quangos across government will have to make major the shadow Chancellor, for this early opportunity to set savings in their budgets, and regional development agencies out to this House the action that this Government are will have to cut back on the spending that has the lowest taking to deal with the urgent economic situation and, economic impact. Finally, we have decided to allocate, frankly, the economic mess that we have inherited from out of these savings, £500 million this year to measures our predecessors. I refer to the House to the written to invest in improving the country’s growth potential ministerial statement that I laid in the House this morning, and building a fairer society: £150 million will be used which sets out the details of this early action. to help to deliver up to 50,000 adult apprenticeship The previous Government were borrowing at the rate starts; following the complete shambles of the colleges of an additional £3 billion per week—that is an capital programme under the previous Government, an unsustainable rate. Those huge public debts threaten additional £50 million will be allocated to help to fund financial stability and, if left unchecked, would derail capital investment in the further education colleges in the economic recovery. We need not look far across our greatest need; and we are allocating an additional own continent to see that action to tackle our budget £170 million to fund investment in social rented housing deficit is both urgent and necessary, and this is only the in 2010-11 to help to deliver 4,000 social housing starts— first step in a long road to restoring good management Members on both sides should welcome that. We will of our public finances. also freeze the backdated business rates payments under I set out in a written ministerial statement this morning the eight-year schedule of payments, including in respect the details of the spending cuts that we will make for of businesses in ports, until April 2011, and we will Departments in 2010-11. We have found cuts totalling consider any further action in this area and bring forward £6.243 billion—that is £243 million more than originally any plans before the freeze ends. targeted. However, the budgets for health, for international These are only the first steps that will be needed to development and for defence will not be reduced. In put our public finances back in shape, but I believe that addition, because we have been effective in finding the public and most Members of this House will welcome savings, we have been able to take the important decision the fact that we finally have a Government with the guts to protect the budgets for schools, Sure Start and 16 to and determination to take these difficult decisions. 19-year-olds in 2010-11, which I am sure Labour Members will welcome. Mr Darling: First, I am grateful to the Chief Secretary—I The devolved Administrations will have the option of am just sorry that the Chancellor of the Exchequer making their savings this year or deferring their share of could not make it. It is important, especially as the the savings until the next financial year, and they will Government have difficult decisions and announcements also receive their share of the additional spending that to make over the next few months, that the Chancellor has been agreed as part of this statement. We will help should be ready to come to this House to justify what he local government to deliver its savings by removing the is doing. Will the Chief Secretary accept that there is no ring fences around more than £1.7 billion of grants to good reason why the announcement made at a press local authorities in 2010-11. That is consistent with our conference on Monday could not have been made in a belief in giving more freedoms to local government. statement to the House, where it could be scrutinised by Our first priority has to be to cut waste; we cannot Members of the House? Will he undertake that, in expect difficult decisions to be taken on spending until future, announcements of this magnitude will be made we have eliminated the waste. We expect Departments in this House and not through a press briefing? to make savings, which will include £1.15 billion in Secondly, everyone knows that it is necessary for cutting discretionary areas, such as consultancy, travel countries across the world—ours included—to reduce and advertising costs. In addition, £1.7 billion will come the amount of borrowing but to do it in a way that does from delaying and stopping contracts and projects. not damage growth and that does not damage the That will include immediate negotiations to achieve economic fabric of this country. That is why I believe 157 Government Spending Cuts26 MAY 2010 Government Spending Cuts 158 [Mr Darling] that he took over the economic position and the Treasury at a difficult time and also had to deal with the difficult that to halve our deficit over a four-year-period was the circumstances of having a Prime Minister of the type right thing to do, because it would have enabled us to that the last Prime Minister was. I pay tribute to the secure the recovery, which is still fragile. Does the Chief work that he did. Secretary understand that although during the general I was very interested in the points that the shadow election campaign the Conservatives said that they would Chancellor made in response to my statement, but the not cut beyond eliminating what they called waste and only thing missing from all the questions that he asked inefficiency, they have gone far beyond that today? was any acknowledgment of what his colleague, the Does he not accept, too, that he campaigned explicitly former Chief Secretary, was able to acknowledge to me on a platform of not reducing expenditure this year? in the letter that he left on my desk—the former Will he tell the House how cutting 10,000 university Government left a situation in which there was no places can possibly amount to the elimination of waste money left. I say to the shadow Chancellor gently that and inefficiency? That is not being wasteful or inefficient; the only thing missing from his statement was a single that is cutting the investment that we will need to ensure serious proposal about how to deal with the huge that we have the skills in the future. financial deficit, with £156 billion-worth of borrowing Will the Chief Secretary also tell us where the and £3 billion-worth of borrowing each week. He is an Government said that they would cut the job prospects intelligent enough man to know that there are only for young people in particular? The future jobs fund three ways of tackling the structural deficit—we can cut meant that young people coming out of university had spending, cut welfare payments or raise taxes. There the prospect of getting work. Instead, tens of thousands was not a single clue in the statement that we just heard of young people will not have work and their first from him about how he would address those challenges. experience in working life will be of being on benefits, May I also respond to the shadow Chancellor’s point not of going into work.