Rt Hon Lord Lilley

    Mr. Darling: My hon. Friends are asking why the country had to wait 18 years for this sort of reform.

    We are determined to tackle child poverty. We inherited a situation where one child in three is brought up in poverty—what an indictment of one of the most industrialised countries in the world. We have introduced significant reforms, including the increase in child benefit by £2.50 from next year, that will ensure that we have a fair and efficient society.

    We have also introduced a Budget for enterprise. Reform to make work pay must be accompanied by an environment that encourages jobs. It must be very galling for the Conservatives to find that, despite their criticisms, nobody outside the Conservative party agrees with them. Our reforms to company taxation have been widely welcomed inside and outside the House.

    Mr. Peter Lilley (Hitchin and Harpenden): rose-

    Mr. Darling: I shall give way in a moment. We have reformed corporation tax by cutting the rate to the lowest level ever, and we have said that it will not increase. We have cut the rates of tax being paid by small business, and we shall see major growth in employment in the small business sector in the future. We have examined ways of improving research and development and we have reformed the capital gains tax system.

    I am about to give way for the last time to the shadow Chancellor. One of the things that business likes most about the Labour party is its positive and constructive attitude to Europe—something that the shadow Chancellor and his right hon. and hon. Friends will never have.

    Mr. Lilley: I am grateful to the Chief Secretary for giving way. He said that nobody agrees with our critique of the Budget. Is he not aware that the TUC has forecast that, as a direct result of the Chancellor’s tightening of fiscal policy and his monetary and exchange rate policies, unemployment will rise by 100,000 during the rest of the year?

    Mr. Darling: At last year’s Tory party conference, the Tories tried to tell us that much of the past 18 years had been a ghastly mistake. They claimed that they were a caring party and that they were sorry for everything they had done. The right hon. Gentleman now says that the TUC is the friend of the Tory party, but that claim has no credibility whatsoever.

    I emphasise the fact that, because we have exercised prudent control on public spending this year, we have been able to carry forward £l½ billion to next year. As we are prudent, we have allocated half a billion pounds to the reserve. However, we have also made more money available for schools, the health service and transport in the coming year. We are showing how, by conducting a root-and-branch examination of all public spending and by rooting out waste and inefficiency, the Government have been able to redirect money to our priorities in this Parliament and beyond. We shall see a great deal more of that during this Parliament.

    Prudent management of public spending has allowed us to allocate more money to our priorities. An extra £250 million for schools brings the total new money invested in schools since the election to £2½ billion—that is more money than the Liberal Democrats ever promised. We have been able to increase the amount of money going to the health service by an additional £2 billion. That money would not have been available but for the new Labour Government. We have been able to put money into public transport, and we are beginning to make up the backlog of investment needed in the London underground system, which was so neglected by the previous Government.

    Last July, the Chancellor took the first steps towards modernising the British economy, ensuring that we have economic stability and reducing the huge levels of debt that we inherited from the previous Government. We have reformed the Bank of England. We have yet to hear the Conservatives’ position on the Bank of England, but most people recognise that that was a useful and a good reform. We are modernising the welfare state, and this Budget is a further step change along the way. We have extended the new deal, financed by the windfall levy on the privatised utilities. We are reforming the tax and benefit system and we are ensuring that work pays. We are making sure that help goes where it is needed. We are redirecting assistance to families with children, giving children the start in life that we promised them and that we know they need.

    Of course, modernising the welfare state goes hand in hand with encouraging enterprise. Enterprise and fairness go together. We are helping business; we are encouraging investment; we are reducing business tax and red tape. We are redirecting public funds to where they are needed, in schools, hospitals and transport. We are making sure that spending follows this Government’s priorities in this Parliament and beyond.

    This is a radical and reforming Budget. We are committed to a fairer society. We are committed to reversing the inequalities over which the Tories presided.

    We want a more productive, high-employment economy. This is a new Labour Budget and, step by step, we are delivering our manifesto promises. This is a Budget for enterprise and fairness, a Budget that has set new ambitions for Britain. I commend it to the House.