Students of political history will know that it is usually at this stage of a Parliament that past Labour governments have been forced by economic circumstances to slash public spending. Bad electorally for our party, of course, but far worse for the country which saw emergency cuts in funding for schools, hospitals and other key public services.
But not this time. Not with this Labour Government. We are not cutting back investment in our vital public services, but increasing it. The Comprehensive Spending Review in July announced record, sustained and affordable increases in funding for education, health, transport and fighting crime.
It is funding to seriously tackle the legacy of decades of under-investment in our infrastructure. And because of the reforms being put in place, it’s investment which will be used wisely to deliver strong and dependable public services.
There is an increase of over six percent in funding for the health services in real terms for the next four years. It is twice the average increase the NHS has enjoyed since it was created. It’s money to drive through the National Plan, to revive and renew our health service – to recruit more doctors and nurses, improve the quality of care and service and modernise our NHS.
There’s a 5.4 percent rise in education funding above inflation which is more than three times the average increase of the last Tory Government. It means spending on education will have increased more in the five years covered by our Government’s two spending reviews that it did in the eighteen years of Tory rule. There’s increased funding for schools, for our poorest children through Sure Start and to tackle the scandal of adult illiteracy.
We are also doubling public investment in transport to cut congestion, increase choice, expand and modernise public transport plus improve traffic flow on our roads. It’s the investment to help start transforming our transport system under John Prescott’s ten year plan.
There’s investment, too, to recruit more than 4,000 extra police to step up the battle against crime. Money for a new Neighbourhood Renewal Fund and for Regional Development Agencies to help ensure all communities and parts of the country can contribute to our rising prosperity.
There’s investment as well to make permanent, and expand, the New Deal, which, as the minister responsible for setting it up before I came to the Treasury, I’m proud to say has cut youth unemployment by over 60 percent. And there’s extra funding to tackle the backlog of housing repairs; for the arts and sport; to modernise our welfare system and to increase international aid.
It’s investment to build on the solid progress we have already seen over the last three years which has helped deliver 10,000 extra nurses and 5,000 more doctors for the NHS, casualty departments being modernised, smaller infant classes in our schools and repair work to 11,000 schools.
I know this money is desperately needed. It’s also investment which has the support not just of the party, but of the overwhelming majority of the electorate – whichever way they voted. But it’s also important that Progress readers remind people how it is the country can now afford this record investment and sustain it.
This extra investment has been hard won. It can be afforded because the Government did not duck the hard decisions needed to build a platform of long-term economic stability and to put an end to the disastrous cycle of boom and bust which has caused so much damage to business, families and our country.
We inherited an economy where the national debt had been doubled and annual borrowing was running at £28 billion a year. So we kept to tough spending limits for our first two years as we promised. We have the Bank of England independence and responsibility for meeting tough inflation targets.
They were decisions which were not always popular – even within our party – but we are now seeing the rewards. We have a stronger and more stable economy with a million more people in work. Inflation is low and on target. Tory debts are being reduced. Interest rates are half the level they reached under the Tories.
Record employment levels mean less needs to be spent on economic and social failure. Reducing Tory debts means lower interest repayments – £5 billion a year saved by 2004. It’s why the country can now afford sustained increases in public investment.
It’s also why so much more of this money can be targeted on our schools, our hospitals and other key public services. During the eighteen years of Tory rule, debt interest, unemployment and social security accounted for 43 percent of all public spending. In the coming three years, they will account for only seventeen percent. It means not only can we increase overall spending, but that we’ve been able to allocate so much more to our priorities – education, health, transport, housing and law and order.
In all, there is an extra £43 billion for our frontline services over the next three years. Money which can be afforded because we have reduced the cost of debt and social and economic failure so that extra resources can be released to extend opportunity and security for all. It is a record of which any Labour Government in the past would be proud – and so should we.