Public Expenditure (Hansard, 5 February 1976)

§ 5. Mr. Aitken
asked the Chancellor of the Exchequer whether he has any plans to implement the proposals of the Expenditure Committee with regard to the Financing of Public Expenditure (ref 69–1) published on 11th December 1975.

§ Mr. Joel Barnett
I am still considering this Report and a reply will be given in due course.

§ Mr. Aitken
Is the Chief Secretary aware that that is a disappointingly slow response to the Committee's criticisms? Does he accept that they were a devastating indictment of the Treasury's inability adequately to control public expenditure? What specific steps does the Chief Secretary intend to take to make sure that there is not another £5,800 million of unplanned expenditure and will those steps include cash limits?

§ Mr. Barnett
We shall be introducing cash limits. It is not true that the response is slow. We hope to give a reply to the Committee in the next week or two. The allegations about the so-called £5 billion are wholly untrue and were answered by the Treasury in evidence to the Committee.

§ Mr. Ridley
The Chief Secretary will know that one reason for the £5.8 billion was the very high increase in the price of land and houses. Now that the price of land and houses has fallen, to what great saving in public expenditure may we look forward?

§ Mr. Barnett
I am sure that the hon. Gentleman can control himself sufficiently to wait for the public expenditure White Paper. As he rightly said, part of the £5 billion to which Mr. Godley referred arose from the rather uncontrolled growth of the money supply during the period when the Conservative Government were in office, a Government whom the hon. Gentleman sometimes supported.

§ 6. Mr. Lawson
asked the Chancellor of the Exchequer by what date, at the latest, he expects to publish the public expenditure White Paper; and whether that White Paper will contain the promised publication of the various cash limits for expenditure 1976–77.

§ Mr. Joel Barnett
My right hon. Friend expects to publish the White Paper on 1394 public expenditure on 19th February. It will not include details of cash limits for 1976–77. As announced in the debate on the Address on 25th November, details of the cash limits would be published around the beginning of the financial year.

§ Mr. Lawson
I am grateful to the Chief Secretary for his announcement of the date of the public expenditure White Paper. Presumably that means that for the time being at any rate the differences within the Cabinet have been resolved, and I am delighted to hear it. Will the Chief Secretary assure the House that the system of cash limits will mean a great deal more than the mere allocation of the relative price effect among the component parts of the public expenditure programme? Will he further assure the House that public expenditure in 1976–77 will not materially exceed the figure envisaged at the time of the Budget, when cuts of £900 million were announced?

§ Mr. Barnett
The hon. Gentleman will have to wait until he sees the White Paper, which will give him all the information he requires on cash limits. Expenditure for 1976–77 will be disclosed on 19th February in the public expenditure White Paper.

§ Mr. Lane
Will the White Paper give clear evidence that the Government are in earnest about shifting resources from the public sector into more productive channels?

§ Mr. Barnett
We shall set out in the public expenditure White Paper the Government's policy for public expenditure both for 1976–77 and the years thereafter.

§ 7. Mr. Michael Latham
asked the Chancellor of the Exchequer whether he is now in a position to announce detailed proposals for public expenditure levels in the next financial year.

§ Mr. Joel Barnett
These will be included in the White Paper on public expenditure to be published later this month.

§ Mr. Latham
Will the White Paper confirm or deny the extensively leaked report that one cut in public expenditure will be in Civil Service manpower?

§ Mr. Barnett
I cannot confirm or deny anything. I am sure that the hon. Gentleman will be happy to wait until 19th 1395 February to see precisely what the White Paper contains.

§ Mr. Frank Allaun
Will my right hon. Friend bear in mind that unemployment is now so widespread and so serious that, unfortunately, there will not be enough resources and manpower to cover both necessary public expenditure and the investment in industry which he requires?

§ Mr. Barnett
I know that my hon. Friend will agree with the Government's policy, announced some time ago, of not cutting public expenditure now for precisely the reasons he gave—namely, the present level of unemployment, about which he and I are concerned. That is why we shall not be cutting public expenditure for 1976–77.

§ Mr. Henderson
As the right hon. Gentleman has been generous enough to take us into his confidence about the date of publication of the White Paper, will he tell us when the Budget Statement will be made?

§ Mr. Barnett
I am happy to do that as well—6th April.

Mr. Cow
Will the Chief Secretary allay the fears of the public and the foreign bankers by telling the House that the amount of money which the Government intend to borrow next year will be significantly less than the £12,000 million they are borrowing this yar?

§ Mr. Barnett
I am sure that the hon. Gentleman will be happy to wait in patience both for the public expenditure White Paper and for other statements in the Budget on 6th April which will make everything clear to him and everyone else.

Mr. Helfer
As 200,000 construction workers are out of work, will more finance be made available to local authorities to enable them to bring out of their pigeon-holes construction plans which are temporarily held back? Would not that be a great boost for the construction industry and help to bring down unemployment?

§ Mr. Barnett
I entirely share my hon. Friend's concern. My right hon. Friend the Chancellor of the Exchequer will be making a statement next Thursday dealing with certain aspects of that matter.