Harman attacks 'lies' on public spending

GOVERNMENT public spending estimates due for publication today will show substantial further cuts in capital expenditure on schools, hospitals and other investment projects.

Harriet Harman, shadow chief secretary to the Treasury, said the so-called Treasury 'Grey Book' showed there would be pounds 750m less public investment over the three years from April than the Government projected at the time of the combined November Budget and public spending statement, which had already severely pruned departmental expenditure.

Ms Harman said: 'Now people are facing up to the fact that not only will they be paying more, but getting less.

'The Government lied about their tax plans. Now it is clear that they lied about their public spending plans. The price of the Government's economic failure is not only higher tax bills but is also cuts in planned investment on hospitals, schools and transport.'

The Labour attack contrasted with a warning from Lord Tebbit, the former party chairman, that the Government should return to Thatcherite principles of low borrowing and low taxation.

Ministers have faced strong demands from the Tory right to re-examine the next three years' spending totals to see if taxes can be reduced before the next election.

A comparison of today's figures with last autumn's will also show a pounds 72m extra cut in the current financial year.

Ms Harman said the cuts came against a background of relentless Tory cuts in public investment since 1979 and were more broken promises from the Government. Public sector investment as a percentage of GDP had fallen from 6.4 in 1979 to 4.6 in 1993.