HC Deb 06 July 1976 vol 914 cc1163-5
Q4. Mr. Lawson

asked the Prime Minister when he next intends to make a ministerial broadcast on the state of the nation.

Q8. Mr. Norman Lamont

asked the Prime Minister when he intends to make his next ministerial broadcast on the state of the nation.

The Prime Minister

I refer the hon. Members to the reply which I gave to the hon. Member for Blaby (Mr. Lawson) on 27th April.

Mr. Lawson

I am grateful to the Prime Minister for his second reply. Is he aware that when he does make this ministerial broadcast, to which we all look forward, he should be comforted by the knowledge that, whatever his friends below the Gangway think, we on the Opposition side of the House wish him the best of luck in the discussions on which he has just embarked with his Cabinet colleagues, with a view to cutting public expenditure?

The Prime Minister

With my lack of classical education, I hope I shall not be ruled out of order if I say timeo Danaos et dona ferentes.

Mr. Speaker

Order. Was that Welsh?

Mr. Heffer

Like you, Mr. Speaker, I would not know whether that was Welsh or anything else. Will my right hon. Friend indicate that when he next makes a ministerial broadcast he will explain to the nation what will happen if the various companies that are to get investment reliefs and higher profits do not invest? What steps will be taken by the Government to deal with those companies?

The Prime Minister

I agree with my hon. Friend that that is an important question. At tomorrow's meeting of the NEDC, at which I hope to take the chair, I shall be seeking the view of the CBI in regard to its attitude to member companies. From the contacts that I have had so far with Lord Watkinson, I believe that the CBI intends to encourage companies to undertake a high level of investment. As to what will happen if it does not succeed, I would prefer to wait for the moment rather than make a forecast. In regard to my answer to an earlier supplementary question, may I say, for the benefit of non-Etonians, that the phrase I used means "I fear the Greeks even when they bring gifts".

Mr. Norman Lamont

Is the Prime Minister aware that we welcome his recent statement to the effect that public spending next year will have to be cut? Should he not make it clear, however, that this is a major reversal of Government policy and is not due to changes in external circumstances, and that the only reason why these painful readjustments are being made is that the Government foolishly and stupidly overspent in the last two years?

The Prime Minister

No, Sir, I do not accept any of those qualifications. It is true that public expenditure has increased by 20 per cent. in the last three years. That is a very much faster rate than that represented by our gross domestic product, but it has had the result, among other social matters, of enabling our old-age pensioners, almost for the first time, to enjoy a good standard of living, although we would like to see it improve. In the case of nursery education for children under 5 years of age it has meant that provision in the last two years has increased by one-third. All these are valuable social aims, which have helped buttress the social contract. If, for a year or so, we now have to rein back, this will be understood by all those who benefit.

Mrs. Castle

Is my right hon. Friend aware that it is the chopping and changing in plans that is so demoralising and wasteful—for example, in the hospital building programme, where there can be a great waste of public money by incurring design costs for schemes that are not then pursued? Will he say exactly what has changed since February of this year when the House received the results of the long-term review of public expenditure and what has led the Government to say that all the plans will now have to be reversed?

The Prime Minister

I agree with my right hon. Friend that it is demoralising where there is constant chopping and changing in Government policy. I think that public expenditure has suffered because of that. If I may go back over a decade, it was for this reason that when I was Chancellor of the Exchequer over 10 years ago we introduced the system of looking three or four years ahead at the level of public expenditure. But in trying to do that, we fell into the error of measuring increases only in terms of resources required, instead of looking also at the finances required. It is that correction which we are now having to make.

As for the question of what has changed since February, as regards the long-term plans for 1978–79 nothing has changed. What we are now considering is next year's public expenditure—for 1977–78.

Mr. Watt

When the Prime Minister makes his ministerial broadcast, will he reveal to the nation how much oil the oil companies are obtaining out of the Scottish sector of the North Sea? Will he also acknowledge that the SNP is the only party in this House that got its sums right? Furthermore, will he say that there is no need for any substantial cuts in the public sector if we tax the oil companies at a decent rate?

The Prime Minister

There is a pretty good rate of tax now being levied on the oil companies. As regards the other part of the hon. Gentleman's supplementary question, it would be more appropriate for the hon. Gentleman to make a broadcast rather than for me to make his points.