Clegg and Rogerson quiz Brown on G20

' . . WILL he now accept that my party's plans to redirect wasteful spending to things that people really need in a recession-such as homes, child care, education, training and fairer taxes-is the right thing to do?'

• [Nov 17]: Nicholas Clegg (Party Leader; Sheffield, Hallam, Liberal Democrat): I would like to add my own expressions of sympathy and condolence to the- [Interruption.]

Michael Martin (Speaker): Order. Mr. Luff, you should calm down- [Interruption.] Order. The hon. Gentleman should calm himself, or is he telling me that I am not chairing the proceedings properly? I do not think that he would want to do that.

Nicholas Clegg (Party Leader; Sheffield, Hallam, Liberal Democrat): I would like to add my own expressions of sympathy and condolence to the family and friends of Colour Sergeant Dura and Marines Neil Dunstan and Robert McKibben who tragically lost their lives in Afghanistan this week.

I thank the Prime Minister for his statement. I, too, think that it was good that this was a G20 summit, which included new powers such as India, China, Brazil and others. I hope that that will be a precedent for the future because global governance can no longer be a stitch-up of the old powers alone.

I also strongly agree with the Prime Minister' words on the danger of protectionism. The lesson from the 1930s is indeed that narrow nationalism and trade barriers will only make matters worse. Speaking as one who was at the inception of the Doha development round in 2001, I feel strongly that we must seek to trade our way out of this recession.

British exports, of course, will be boosted after the recent fall in the value of the pound after a long period of over-valuation. In my opinion, the shadow Chancellor was well within his own rights to talk about the falling pound, even if he made almost no sense at all. Does the Prime Minister agree that this sudden desire for currency stability is a bizarre U-turn from a party that once referred to the euro as a "toilet paper currency"?

The Prime Minister spoke a great deal today about a fiscal stimulus, and it is rumoured that he wants to borrow money for a temporary tax rebate. In my view, it is right to give money back to people on low and middle incomes who are more likely to spend some of that money, but instead of borrowing for a one-off tax cut, the Prime Minister could pay for a big permanent tax cut by ending unfair loopholes for the very wealthy. Would not that be fair? The right thing to borrow for is not short-term cash bribes, but long-term capital investment in infrastructure that the country needs in any case. Does he agree that extra borrowing can be justified only to fund green energy, sustainable transport and the homes we need for a sustainable economic recovery.

The Prime Minister still seems incapable of differentiating between good public spending and bad public spending. Why in the teeth of this recession, does he still want to waste £13 billion of the public's money on an NHS computer system that will not work, £12 billion of it on a surveillance database that no one wants and £5 billion on ID cards that no one needs?

I know that in the past the Prime Minister has struggled to distinguish between cutting public spending and redirecting it as we want, but will he now accept that my party's plans to redirect wasteful spending to things that people really need in a recession-such as homes, child care, education, training and fairer taxes-is the right thing to do?

The Prime Minister has spent several weeks jetting around the world. Will he now focus on three key steps that will help people here at home: permanent fairer taxes, borrowing only for long-term investment, and redirecting public spending towards the things that people really need in a recession?

Gordon Brown (Prime Minister; Kirkcaldy & Cowdenbeath, Labour): The first thing that I should say to the hon. Gentleman is that it is important that we do not cut capital investment at this time. The capital investment that we are making in homes, education, the health service and the environmental technologies of this country is capital investment that we will continue. I hope that the hon. Gentleman will be able to support us when we say that it would be totally wrong, at a time when we are preparing for the next stage of the world economy, to cut capital investment in those areas.

I must also say to the hon. Gentleman that we have removed tax loopholes in every Budget since 1997, including the loopholes removed by the Chancellor in the last Budget. I see no evidence from my reading of the Liberal Democrats' policy document that they can find the billions that they say are to be found in the cutting of tax loopholes, and I believe that, when subjected to rigorous examination, their policy once again does not stand up.

I have to tell the hon. Gentleman that if he cuts public expenditure and says that that constitutes savings, as he is doing, he is still cutting public expenditure by £20 billion.

• . . Daniel Rogerson (Shadow Minister, Department for Communities and Local Government; North Cornwall, Liberal Democrat): As the Prime Minister considers his approach to dealing with all these issues, will he instruct Her Majesty's Revenue and Customs to be as sympathetic as possible to those employers who are temporarily experiencing problems with cash flow, in the hope that jobs that will be crucial to the future recovery of the economy can be safeguarded for the future?

Gordon Brown (Prime Minister; Kirkcaldy & Cowdenbeath, Labour): That is what we would try to do in these circumstances, and I assure the hon. Gentleman that HMRC will do what it can.

… … …