PUBLIC EXPENDITURE (Hansard, 4 December 1973)

§ Q4. Mr. Bruce-Gardyne
asked the Prime Minister if he will appoint a second Treasury Minister to his Cabinet with responsibility for the curtailment of public expenditure.

§ The Prime Minister
My right hon. Friend the Chancellor of the Exchequer already has overall responsibility for the management of public expenditure, and its rate of growth is being successfully curtailed.

§ Mr. Bruce-Gardyne
I am grateful to my right hon. Friend for that reply and for his decision on the appointment of the Paymaster-General. Is he aware that it will be widely welcomed as helping to lift some of the heavy burden carried by my right hon. Friend the Chancellor of the Exchequer for so long? However, has my right hon. Friend noted that over the past 15 years there has been a certain correlation between the periods during which the Minister with immediate responsibility for control of public expenditure has not been a member of the Cabinet and those during which the share of total resources pre-empted by the public sector, and hence inflation, has tended to grow?

§ The Prime Minister
I thank my hon. Friend for his helpful words at the beginning, but I cannot agree with his thesis in the second part of his question. The Chancellor is responsible for Government expenditure, assisted by the Chief Secretary. That remains the position. The Paymaster-General is not responsible for that sphere of the Treasury's work. My right hon. Friend the Chancellor has often explained to the House that Government expenditure was deliberately allowed by the Government to grow faster than the rate of growth, up to the middle of this year. It was then curtailed, and from 1974 onwards it will be less than the rate of growth in the country. That was deliberate policy carried out by my right hon. Friend and the Government.

§ Mr. Healey
Is the Prime Minister yet in a position to quantify the reduction in this year's public expenditure due to the 1086 collapse of public building, referred to by a Treasury witness in a Committee yesterday?

§ The Prime Minister
No, Sir. There is no collapse of public building. The Government account for roughly 50 per cent. of the construction industry's activity. What the Government have done is to slow down the immediate demands to allow the construction industry to cope effectively with them.

§ Miss Joan Hall
Is my right hon. Friend aware that many ratepayers are not happy about the new salaries being offered to officials in the new local government areas and feel that there could be a curtailment of expenditure in that respect?

§ The Prime Minister
That is a question for the local authorities themselves to deal with, within the grant arrangements made by the Government.

§ Mr. Dalyell
Could the second Treasury Minister have a look at the through-deck cruiser programme, costing £110 million a ship?

§ The Prime Minister
As I have said, the Chief Secretary is particularly responsible to the Chancellor for control of Government expenditure, and defence expenditure comes under his review.

§ Mr. Roy Jenkins
May I ask the Prime Minister, arising out of his answer to an earlier question about the planning of public expenditure, whether the Government deliberately planned for a public sector deficit amounting to about £4,000 million in the belief that it would assist the health and balance of the economy?

§ The Prime Minister
I have said quite clearly that the Government extended expenditure beyond the rate of growth. My right hon. Friend the Chancellor told the House at the time of the Budget his calculation of the Government's borrowing requirement. There have been recent indications that the borrowing requirement may not be as great as was earlier thought. That is a very clear position.