HC Deb 18 February 1971 vol 811 cc2123-5
Q5. Mr. Sheldon

asked the Prime Minister if the public speech of the Chancellor of the Exchequer in London on 27th January to the United States Chamber of Commerce on public expenditure represents Government policy.

Q14. Mr. William Hamilton

asked the Prime Minister if the speech made by the Chancellor of the Exchequer in London to the United States Chamber of Commerce on Wednesday, 27th January on the question of public expenditure, represents the policy of Her Majesty's Government.

The Prime Minister

Yes, Sir. As did also that part of the speech dealing with Anglo-American relations and the value of the British market to American traders.

Mr. Sheldon

Yes, but since my Question dealt with the aspect of public relations—[Laughter.]—public expenditure, I mean, what will the right hon. Gentleman do since he reduced income tax by 6d. in the £ last autumn and at the same time attributed that cut to reduc tions in public expenditure, about the blanket promise that any foreign bid for Rolls-Royce would be surpassed by one from the Treasury? How will he get that money—by further reducing the limits of public expenditure or by increasing taxes?

The Prime Minister

I always thought that the hon. Gentleman was more interested in public relations than in public expenditure. On the second part of his speech, the Receiver is in negotiation with the Government, following the passage through Parliament of the Bill for the purchase of Rolls-Royce, which will be done on a fair valuation.

Mr. Hamilton

Since the Chancellor of the Exchequer boasted in that speech about the proposed reductions in public expenditure in the next five years and said that £700 million of that reduction was in aid to commerce and industry, which has already resulted in 30 companies telling the Secretary of State for Trade and Industry that they will not pursue plans for settlement in the development areas, how can the Prime Minister or his right hon. Friend justify that kind of cut, if it will so adversely affect the unemployment situation in the development areas?

The Prime Minister

The second part of that question is not related to the facts. As I told the House last Tuesday in answer to the Leader of the Opposition, 37 firms said that they were reviewing their investment arrangements. Of these, only two said that they were not going ahead due to the change from investment grants to investment allowances.

Mr. Dalyell

Is it wise to tell Lockheed that it can wait for at least a month? What on earth do the Government expect the sub-contractors to do in the meantime?

The Prime Minister

The Receiver is carrying on certain work on the RB211, but the Government are determined to have an independent investigation which will, for the first time, reveal clearly what the position of this engine is, what its technical capacity is, what its ultimate cost will be, what the true cost of development will amount to, and by what date it can be produced. Surely the House will agree that, where public money is concerned, it is essential that a Government should act responsibly on this information—information which was apparently never available to the last Administration. When that information is available, we can then have detailed discussions with Mr. Haughton.