HC Deb 22 November 1966 vol 736 cc1133-4
28. Mr. Ridsdale

asked the Chancellor of the Exchequer what action he is taking to reduce the growth of Government spending.

37. Sir J. Eden

asked the Chancellor of the Exchequer what directives he has given to Government Departments to undertake a specific and formal cost reduction programme.

Mr. Callaghan

Departments have been instructed to conduct a searching reconsideration of the need for every part of their proposals for inclusion in the Estimates for 1967–68, which I shall lay before the House in due course.

Mr. Ridsdale

But why are the Government continuously trying to kill the goose which lays the golden egg? Surely the high level of Government spending is a direct cause of the fall in industrial production. How can we have new wealth for the social needs unless we are able to increase industrial production? Will the right hon. Gentleman stop being so complacent about this?

Mr. Callaghan

That comes very ill from a former Minister in a Government under which defence spending was quite unrestrained. We have succeeded in curbing and reining back unnecessary expenditure to a degree never undertaken by our predecessors. It is not right to say that the general level of taxation is higher than it is in other countries. The average level of taxation in this country is well in line with that of our competitors overseas.

Mr. Orme

Would my right hon. Friend recognise that any attack which he makes, particularly on Government military expenditure overseas, will have the fullest support of many Members on this side of the House?

Mr. Callaghan

It is the Government's declared policy to reduce overseas military expenditure, which has been too high in relation to the total burdens which we carry, and we shall continue to pursue that aim.

Mrs. Thatcher

Would the right hon. Gentleman say whether at the level of Government expenditure which he is contemplating for next year he will have to lake an increasing proportion of the gross national product in total taxation?

Mr. Callaghan

When the Estimates are laid, I am sure that the hon. Lady will want to examine them. But I can tell her that we have been able to prune back a great deal of the luxuriant expenditure which her Government left behind.