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8 June 1998
PRUDENCE FOR A PURPOSE
"We are determined to make improvements in education and health, to improve our transport system, but we can only do this if we face up to the hard choices and tough decisions necessary in Government", said Chief Secretary Alistair Darling today. "Prudence yes, but prudence for a purpose - to ensure that we get the schools and hospitals we need."
Speaking at the annual conference of the MSF union in Bournemouth he said;
"For too long Governments have failed to manage their finances in a way that promoted long term quality and viability in public services. Too many Governments in the past took the axe to investment because it was the easy option in the short run. The quick fix. We can see that everywhere, in schools, hospitals, railways and housing. The result has been chronic under-investment in public services.
This is damaging not only to the strength of our society but also the long run
performance of our economy. That is why we are determined to put in place a better framework for making budget decisions. A clear emphasis on the need to invest.
We will borrow only to invest over the economic cycle - we will ensure spending
which benefits people today will be paid for by people today. But we won't build up debt irresponsibly. We will keep the ratio of debt to GDP at a stable and prudent level. These are the two rules that underpin our comprehensive spending review. And whatever the pressures or difficulties we face, we will not be diverted from these tough rules.
Our new approach to public spending focuses on what spending is intended to achieve and the investment necessary to achieve it rather than how big the budget is.
We are determined to lock in the gains we have achieved since we came to power. Those who said we would fail to show the necessary discipline on public spending have been proved wrong. That discipline will be continued because that's the way to improve the schools, hospitals, transport and housing - the public services we need."