Tories attack Chancellor for failing to meet targets

Gordon Brown promised yesterday to reverse "decades of under investment" in public services as he outlined a £61bn, three-year package of spending and reform.

He was cheered by jubilant Labour backbenchers as he outlined increased expenditure on education, transport, housing and defence.

Mr Brown promised an overhaul of public services to accompany the injection of cash, promising that "we are tying new resources to new reform and results, developing a modern way for running efficient public services".

But there were bitter exchanges between Mr Brown and Michael Howard, the shadow Chancellor, who accused Labour of failing to meet its own targets, while Matthew Taylor, the Liberal Democrat Treasury spokesman, attacked Mr Brown for "control freakery".

Mr Howard said: "Why hasn't the Chancellor learnt the lessons of his past failure? After six Budgets, five years in office, three spending reviews and countless promises, isn't it abundantly clear that the Chancellor and his colleagues simply don't know how to bring about real reform and improvements in the public services?"

Mr Brown told MPs the increases in funding were possible "because the bills of economic failure in unemployment and debt have been radically reduced". He said: "The state of our public finances is strong, and despite uncertainties in the global economy inflation is under control, interest rates have been low and stable, and unemployment and growth continue to rise."

He insisted the Government would meet its fiscal targets by the end of the fiscal cycle "with a margin for prudence even on the most cautious case".

The Chancellor said all the extra resources were allocated on condition that "failing institutions will be dealt with early and decisively". He said: "Behind each decision we are making today ... the Government's standard is clear: for more given in resources, more is required in results," he said.

Mr Brown announced new funds for community organisations, museums, defence, crime and foreign affairs. But he devoted most of his speech to education. "What happens in our schools in this decade will shape our society and our economy for much of this century," he said. "The education budget for England, which was £29bn in 1997, will rise over the next three years to £58bn. This is what we mean by education, education, education."

But Mr Howard said: "He says the money will improve our schools, our health service and our transport system and make our streets safer, but that is what he said two years ago. He promises modernisation in our public services ... but that was his statement four years ago. He promised reform every year since; so where is the reform, where is the modernisation, where is the change?"

Mr Howard lambasted paperwork sent to schools and bureaucracy faced by police and attacked falling productivity in the NHS. "Now the Chancellor is at it again. Another year, another spending review," he said. "The same old promises, the same old failure."

But Mr Brown chided Mr Howard's "silence" on public service issues. He said: "You said you supported the increased funding for action against terrorism and for international development but by your silence you have not supported increased funding for education, for health, for housing, for transport, for the Home Office, for policing, for all the major public services."

He accused the Tories' policy of reform first, resources second, of hiding the opposition's true intentions. He said: "All talk of general reform is designed to obscure a policy of cutting public spending."

Mr Taylor said: "The Chancellor may be able to control his cabinet colleagues but the truth is he can't control every classroom, he can't run every hospital ward. It's time to trust the teacher with their class, trust the doctor with their patients, trust the nurses in their wards. He's given them the money, now give them the freedom to do their job."

Mr Taylor said: "It's not more reform, it's more control. Why is there more control from the centre, more red tape, more control freakery. What is the Chancellor afraid of?"