Labour left welcomes Children Fund

Labour MPs and trade unions were delighted by the Chancellor's spending plans, although business leaders expressed more caution about its impact on the public finances. Left-wingers were particularly pleased at Mr Brown's emphasis on tackling poverty and deprivation and his creation of the national Children's Fund.

Labour MPs and trade unions were delighted by the Chancellor's spending plans, although business leaders expressed more caution about its impact on the public finances. Left-wingers were particularly pleased at Mr Brown's emphasis on tackling poverty and deprivation and his creation of the national Children's Fund.

Alice Mahon, Labour MP for Halifax, said that backbenchers were extremely pleased with the spending review, even though it failed specifically to offer any new cash for pensioners. "I think backbenchers have been cheered up no end. They trust Gordon and I think he is very genuine about his commitment to eradicating poverty, particularly child poverty... The Children's Fund was a great idea, it could see real grass-roots involvement," she said.

Ian Gibson, Labour MP for Norwich North, was more cautious, praising the boost for science and the New Deal, but unhappy that more immediate help was not offered to pensioners. "It's a step in the right direction, but I'm disappointed on pensions... although there was a hint of something in the wind," he said.

Labour whips had reassured most MPs before the statement that extra help for pensioners would be announced in November's pre-Budget report.

Dennis Skinner, Labour MP for Bolsover, praised the statement, but wanted the Chancellor to confirm that pensioners "are going to get 3, 4 or 5 per cent above inflation" in line with other departmental increases.

Rodney Bickerstaffe, general secretary of Unison, claimed that the Chancellor's announcement came "like rain at the end of a long drought". "Much still needs to be done to mend the damage to public services caused by the last government... and the first two years standstill of the Labour Government," he said.

Digby Jones, director general of the Confederation of British Industry, welcomed "the Chancellor's determination to attack the under-investment of the past" but said that there would have to be caution over the spending levels.

Ruth Lea, head of policy at the Institute of Directors, was more critical. "Today's huge increases are only affordable because of the large increases in the tax burden since 1997," she said.

Judith Mayhew, chairman of policy at the Corporation of London, was "delighted that the Government has recognised the crucial part which good public transport plays in continuing to bring economic success".