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CSR Tuesday, 18 July, 2000, 18:06 GMT 19:06 UK
Portillo: 'Big spenders not wise spenders'
Lib Dem Matthew Taylor and Conservative Michael Portillo
Matthew Taylor and Michael Portillo criticise Brown's statement
Labour's pre-election spending boost will fail to produce any improvement in public services, according to shadow chancellor Michael Portillo.

Dismissing the chancellor's 43bn increase in public spending, Mr Portillo said the Tories were prepared to fight the next election as the low tax party.

Responding to Gordon Brown's Commons statement on Tuesday he told MPs: "Labour's spending isn't working".

The Liberal Democrats broadly welcomed the increase in spending on health and education, but called for more money for pensioners.

'Big spenders'

Accusing government ministers of being "big spenders not wise spenders," Mr Portillo told MPs public services had got worse since the election.

We will fight the next election as the low tax party, Labour has been exposed as the high tax party

Michael Portillo
"How can this government spend so much and spend it so badly?" he asked.

The shadow chancellor said Labour governments always ended up in a cycle of tax and spend.

He quoted from Labour's 1997 election manifesto: "The level of public spending is no longer the best measure of the effectiveness of government.

"Was the chancellor being insincere then or is he kidding us now?" he asked.

'Until the pips squeak'

He accused Gordon Brown of introducing stealth taxes and regressive taxation - "taxing those who could least afford it until the pips squeak".

We will scrutinise these figures because we know on every previous occasion the chancellor has sought to mislead

Matthew Taylor
"A chancellor who taxes the poor more is no socialist hero", he said

He said the government only had a war chest to spend because of the last Tory government's economic record.

Gordon Brown responded by challenging Mr Portillo to admit that he was advocating cuts in public spending.

"He lost the last election with his 22 Tory tax rises, and he will lose the election with his 16bn plans for public spending cuts," Mr Brown said.

Liberal Democrat Treasury spokesman Matthew Taylor issued a partial welcome for the statement, but said the chancellor should have done something for pensioners, especially after increasing pensions by just 75p in the last Budget.

'Bust-boom economics'

He said the Comprehensive Spending Review proved the Liberal Democrats have been right to accuse the government of amassing a war chest in the past three years and starving public services in the meantime.

He does not know the extent to which he might have to raise tax

Ken Clarke
"This is bust-boom economics," he said.

He promised his party would scrutinise the figures, because "on every previous occasion the chancellor has sought to mislead".

Unpredictable economy

The last Tory chancellor Ken Clarke intervened, telling MPs that Gordon Brown was wrong to make big spending decisions when he did not know the future of the economy.

"No one can predict accurately now what the growth of the economy will be," he said.

He said Mr Brown should run a surplus now, watch the course of the economy and release funds only when he had "the money in his pocket".

Mr Clarke challenged the chancellor to accept that his spending plans were possible due to a "golden economic legacy".

Mr Brown said the Labour government had managed to turn around the 28bn borrowing requirement left by Mr Clarke.

"He should be more humble about what he achieved when he was at the Treasury," he said.

Fills the hole

Alisdair Morgan of the SNP said money given to Scotland "merely fills the hole created by Labour by sticking to Tory spending plans.

"Labour starved Scottish public services of resources in their first years in office.

He said there was a "big credibility gap" between the Chancellor's words and delivery.

Structural funds

Dafydd Wigley, leader of Plaid Cymru, criticised the chancellor over his announcement on structural funding for Wales.

He pointed out that "of the 540 million coming from Brussels to Wales on Objective One, only 272 million is being passed over and 268 million is being pocketed by the Treasury.

He has conceded the principle but he has kept the cash," Mr Wigley said.

But Labour's Alun Michael, who was first secretary of Wales before losing a no confidence vote over Objective One status, welcomed the settlement.

"[It] enables the National Assembly for Wales to spend in full the money available to Wales under Objective One without cutting into education and health," he said.

See also:

18 Jul 00 | CSR
18 Jul 00 | CSR
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