§ The Chancellor of the Exchequer (Mr. Harold Macmillan)With your permission, Mr. Speaker, and that of the House, I would like to make a further statement about economies in Government expenditure.
The Government set out to achieve savings of £100 million in this current year on services provided in the original Estimates as published. On 26th June I made an interim announcement of savings amounting to £76 million, of which £36½ million was on the defence programme, £14 million on defence expenditure by Civil Departments and £25½ million on other Civil Estimates.
Decisions have now been reached on further savings amounting to £17¼ million. Of this, £9 million is on the defence programme and £8¼ million on the Civil Estimates. Details will be circulated in the OFFICIAL REPORT. Advance copies will be available in the Vote Office immediately.
830 With these further savings the total so far announced towards the £100 million is £93¼ million. I will make a further statement later about the balance. Among the items in the present instalment, I need comment on only two.
First, it is proposed to alter, as from 1st December, 1956, the method of charging for National Health Service prescriptions, the cost of which is today running at nearly 5s. an item. From that date the charge will be 1s. per item instead of 1s. per form. Existing arrangements for refunds will be continued. The saving will be £¾ million this year and £5 million in a full year.
Secondly, it is proposed to make a seasonal increase, from 7½ d. to 8d. a pint, in the retail price of milk as from 1st January, 1957, for the remainder of the winter. The net saving this year will be £4½ million. The charge for welfare milk will not be affected by this change.
I would remind the House that all these decisions about Government expenditure ignore, on the one hand, additional necessary expenditure not provided for in the original Estimates ; and that, on the other hand, they do not take credit for underspending on those Estimates during the year apart from those deliberately planned.
As regards the additional expenditure, Civil Supplementary Estimates were presented in July amounting to some £15 million, excluding Post Office expenditure to be covered by self-balancing revenue. On defence, additional expenditure is being incurred by the Services in connection with the Suez Canal crisis, but it is not yet possible to estimate how much this will amount to during the year.
Mr. H. WilsonWhy is it that every time the Chancellor of the Exchequer has any economies to announce they always fall on those who can afford them least, in this case the sick? I want to ask the right hon. Gentleman two further questions. First, will he explain to the House how he thinks he can reconcile these continuing and forced, induced, increases, in this case in milk, with all his preaching about the "plateau of price stability"?
831 Secondly, will the Chancellor, who, in April, told us that the whole structure of his Budget depended upon genuine economies of £100 million, not now admit to the House that most of the £76 million announced in June were, in fact, disposals of stocks, or once-for-all savings, and whether they were not, in any case, wiped out by his losses over the German negotiations?
Will the right hon. Gentleman not now admit that these "phoney" savings on defence have already been more than lost on Suez, as was made clear by the Secretary of State for War, who said that £7½ million had been spent on War Office account alone?
§ Mr. MacmillanThe right hon. Gentleman has asked me a number of questions and I will try to answer them. The cost on the cost-of-living index of this seasonal change is estimated to amount to 0.22 in the retail cost of living. That is a negligible sum. With regard to the running down of stocks on current consumption, over these savings this represents not more than 3 per cent. of the savings. That answers two of the questions.
As for the change made in the prescriptions, we have to thank the Front Bench opposite for giving us the powers under the National Health Service (Amendment) Act, 1949, under which we are now acting. [HON. MEMBERS : "Cheap."] I would remind the right hon. Gentleman that the Government of the day, in introducing that Bill, claimed that not merely economy was the reason for the change but the need—I use the words of the Minister—
to reduce excessive and…unnecessary resort to doctors and chemists".—[OFFICIAL REPORT, 24th October, 1949 ; Vol. 468, c. 1019.]I understand that this led later to some difficulties between the present Leader of the Opposition and the new Treasurer of the Labour Party.
Mr. SpeakerOrder. The House is in a very noisy mood. I hope that further discussion will be kept at a level tone.
§ Mr. MacmillanThe differences between those two distinguished men have now, happily, been resolved.
Mr. WilsonDoes the right hon. Gentleman realise that although this may be all right for Llandudno it will not go down in the House of Commons? Having failed to answer the questions which have been put to him, is the right hon. Gentleman really trying to tell the House that what was announced and what was necessary in 1949, four years after the end of the war, is now essential to the Chancellor's economic policy eleven years after the war and after five years of Tory Government?
§ Mr. MacmillanNo, Sir. I am only pointing out that hon. Members opposite wanted to do it but had not the courage to go through with it.
§ Dr. SummerskillDoes the right hon. Gentleman charge the 5 million old-age pensioners of this country with having unnecessary recourse to doctors? Has he fully considered what this will mean in practice to those people in the next few months? It is customary for doctors to prescribe on one prescription form for medicine, lotion, or liniment. What the right hon. Gentleman has said this afternoon means that old-age pensioners, who must have recourse to doctors—that is a necessity for old-age pensioners—in the coming months will have to pay 2s. or 3s. if they have medicine, lotion and liniment on the one form. In view of that, would the right hon. Gentleman reconsider the matter?
§ Mr. MacmillanI am very glad that the right hon. Lady has raised that point because that allows me to state, what I think she will like to know, that the arrangements for reimbursement cover all war pensioners who require treatment for their disabilities, all persons in receipt of National Assistance and all old-age pensioners and others who cannot meet the charges without hardship. They will be entitled to be reimbursed.
§ Mr. M. LindsayWhile congratulating my right hon. Friend on his statement, may I ask him whether he can confirm that no economies are contemplated in the roads programme?
§ Mr. MacmillanNo economies have yet been arranged and as far as I know no such economies are contemplated.
§ Miss HerbisonIs the Chancellor aware that this latest despicable attack of his on the sick and the disabled 833 will be greatly resented, particularly as it will be noticed that it was received with cheering and happiness by his own back benchers? Is he also aware that there are many industrially disabled people who need prescriptions every week, whose standard of living is low and who, in face of this latest attack, will have a standard of living which will be shockingly low?
§ Mr. MacmillanI will do the hon. Lady the courtesy of answering the first part of her question, although I thought it was put really more for the purpose of making her statement than of getting my reply to it. It was in the nature of a rhetorical question.
In reply to the second part of the question, which was much more important, I would call the special attention of the hon. Lady to what I have said about the reimbursement arrangements. They will continue and I think that at the moment they are satisfactory.
§ Dame Irene WardMay I ask my right hon. Friend for an assurance that the exclusions to which he has referred will be very clearly stated on the notices in chemists' shops? Is he aware that it has been difficult for those who are excluded from these charges to realise what their rights are?
§ Mr. MacmillanI am glad that my hon. Friend has raised that point. I will consult my right hon. Friend the Minister of Health to see that it is made clear, so that there is no misunderstanding.
§ Mr. J. GriffithsSo that we can have it made perfectly clear, may I ask the Chancellor whether we are to understand his answer to mean that men disabled in industry who receive benefit under the Industrial Injuries Act will be entitled to claim exemption from these new increases?
§ Mr. MacmillanI repeat that war pensioners—[HON. MEMBERS : "The disabled?] I must be allowed to say what I said before. I said that war pensioners who require treatment for their accepted disabilities, persons in receipt of National Assistance and any others who can show that they cannot meet the charges, including those drawing industrial injury benefits, will be able to claim reimbursement.
§ Dr. SummerskillI am sorry to press the right hon. Gentleman, but would he explain to the House how a poor person is to prove that he cannot afford the charges? How can a woman with a number of dependent children, who has to have recourse to a doctor, prove that she cannot afford the charges?
§ Mr. MacmillanExactly in the same way as she has been doing hitherto.
Mr. H. WilsonOn a point of order. I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 on a definite matter of urgent public importance, namely, the statement of the Chancellor of the Exchequer on the Government's decision to make economies in the National Health Service and other public services.
Mr. SpeakerThe right hon. Member for Huyton (Mr. H. Wilson) asks leave to move the Adjournment of the House under Standing Order No. 9 on a definite matter of urgent public importance, namely, the statement by the Chancellor of the Exchequer on the Government's decision to make economies in the National Health Service and other public services.
There is no doubt about the public importance of the matter, but as to the urgency I am quite clear that this does not fall within the Standing Order. I heard the statement say that one charge, for National Health Service prescriptions, is not to come into effect until 1st December, and the other—for milk—was, I think, to take effect from 1st January next. There will be a lot of water running beneath Westminster Bridge before either of those dates and plenty of opportunity to discuss these matters properly. I cannot find that the question comes within the Standing Order on the ground of urgency.
Mr. WilsonFurther to that, Sir, although there may or may not be an opportunity to discuss certain of the economies on the delegated legislation the Chancellor or the Minister of Health will have to bring in, I put it to you that, in view of the impending Prorogation, announced this afternoon, there will be virtually no further opportunity of stopping the Government from pursuing their crazy policy because, as we understood from the Chancellor—obviously, he wants 835 to get this into motion as quickly as possible—between the decision of the Government and its implementation there will be several weeks of administrative action.
Therefore, if we have to leave the matter until the debate on the Address in reply to the Gracious Speech, or even later, for a House of Commons inquest on the question, I submit to you, Mr. Speaker, it will then be too late to stop the Government in the course of action that they have proposed this afternoon.
Mr. SpeakerI regret that I cannot share the view of the right hon. Member. It does not matter what preparations are being made administratively to put these
| ECONOMIES IN GOVERNMENT EXPENDITURE : EFFECTS ON ESTIMATES, 1956–57 (Additional to those reported on 26th June, 1956—HANSARD, Cols. 275–280) | ||||||
| I. DEFENCE | ||||||
| Vote No. | Title of Vote | Reduction | Notes | |||
| NAVY ESTIMATES | £'000 | |||||
| 8. III | … | … | Shipbuilding, Repairs, Maintenance, etc.: Contract Work. | … | 1,725 | Mainly revision of re-fit programme. |
| 10 | … | … | Works, Buildings and Repairs at Home and Abroad. | … | 75 | Review of major works. |
| TOTAL | … | 1,800 | ||||
| ARMY ESTIMATES | ||||||
| 1 | … | … | Pay, etc. of Army | … | 800 | Manpower adjustment. |
| 4 | … | … | Civilians | … | 1,750 | Reduction in requirements of civilian labour in Germany. |
| 7 | … | … | Stores | … | 250 | Reduction in purchases of accommodation stores in Germany. |
| 8 | … | … | Works, Buildings and Lands | … | 500 | Curtailment of certain works services. |
| TOTAL | … | 3,300 | ||||
| AIR ESTIMATES | ||||||
| 1 | … | … | Pay, etc. of the Air Force | … | 1,870 | Mainly reduction in R.A.F. manpower requirements. |
| 4 | … | … | Civilians | … | 550 | Reduction in civilian manpower requirements at home and abroad. |
| 5 | … | … | Movements | … | 250 | Mainly reductions consequent on lower personnel strength. |
| 6 | … | … | Supplies | … | 500 | |
| 7 | … | … | Aircraft and Stores | … | 730 | Reduction in equipment requirements. |
| TOTAL | 3,900 | |||||
| TOTAL FOR DEFENCE ESTIMATES | 9,000 |
§ increased charges into effect. Between the time of the announcement and the time the earliest of them can take effect there will be more than a month and in that time, if the House decides against the Government on a Motion or in any other way, no increased charges will be made. Had the charges to come in tomorrow or some time before the House would have an opportunity of dealing with them I should, of course, have considered the matter from a different angle, but I really cannot find it within my duty, in view of the time which is to elapse before the events can take place, to find that this matter comes within Standing Order No. 9.
§ Following are the details :
837| II. CIVIL | |||||
| Class and Vote No. | Title of Vote | Reduction | Notes | ||
| £000 | |||||
| II. 2 | … | … | Foreign Office Grants and Services. | 750 | Re-phasing of development loan to Jordan. |
| 9 | … | … | Colonial Services | 1,250 | Reduction in loan to Kenya (£1 million) and miscellaneous services. |
| IV. 1 | … | … | Ministry of Education | +210 | Increase in subsidy on school milk consequent on increase in retail price. |
| 14 | … | … | Scottish Education Department | + 30 | Increase in subsidy on school milk consequent on increase in retail price. |
| V.4 | … | … | Ministry of Health | +410 | Increase in subsidy on welfare milk consequent on increase in retail price. |
| 5 | … | … | National Health Services, England and Wales. | 700 | Increase from 1st December, 956, in charge for prescriptions from 1s. a form to 1s. an item. |
| 5 | … | … | National Health Services, England and Wales. | 500 | Reductions in stocks of hospital supplies. |
| 10 | … | … | Department of Health for Scotland. | + 40 | Increase in subsidy on welfare milk consequent on increase on retail price. |
| 11 | … | … | National Health Service, Scotland. | 50 | Increase in charge for prescriptions as above. |
| VIII. 2 | … | … | Agricultural and Food Services | 4,850 | Seasonal increase in the maximum retail prices of all grades of milk by ½d. a pint from 1st January, 1957. |
| 12 | … | … | Department of Agriculture for Scotland. | 340 | |
| — | Various Votes | 250 | Reduction of the average monthly expenditure on Travelling and Subsistence Allowances as from 1st November, 1956 by 5 per cent. of the average monthly provision for the year. | ||
| — | Various (Defence Expenditure by Civil Departments.) | 250 | Miscellaneous (including equipment, railways and ports). | ||
| TOTAL FOR CIVIL ESTIMATES | 8,250 | ||||
| TOTAL : DEFENCE AND CIVIL | 17,250 |