HC Deb 20 July 1976 vol 915 cc1515-7
Q3. Mr. George Gardiner

asked the Prime Minister whether the public speech by the Chancellor of the Exchequer at Newcastle on 3rd July on the subject of public spending cuts represents the Government's policy.

Q6. Mr. Adley

asked the Prime Minister whether the public speech on econo- mic policy by the Chancellor of the Exchequer on 3rd July 1976 at Newcastle to the TUC Northern Region Council represents the policy of Her Majesty's Government.

The Prime Minister


Mr. Gardiner

The Prime Minister concedes that the effect of spending cuts is to increase unemployment in the short run. How does he answer the charge that if only he had exercised some discipline over public spending earlier the short run might now be nearing its end?

The Prime Minister

The increases in the levels of public expenditure have been extremely beneficial to a great many people. The fact that, for example, old-age pensions will be nearly doubled by November is something for which the House should give a great deal of credit. I think that it was right to do this, especially at a time when our resources were not fully used. We are taking steps to redress the situation for next year.

Mr. Kinnock

Is my right hon. Friend familiar with the view that the cuts now being proposed have absolutely nothing to do with resources and everything to do with business confidence abroad? If that is the case, how many more cuts will be required in order to try to achieve the unachievable and satiate the insatiable?

The Prime Minister

I am familiar with that view, and I think that there is some degree of truth in it. However, as I explained in answer to an earlier question, from the Leader of the Opposition, there is a combination of factors here, and different weights apply to them at different times. At the moment I do not think that the resources situation is the vital one, although we are taking into account the fact that manufacturing industry seems to be expanding at a rate of about 8 per cent. a year, which is very fast, and as we are considering next year's public expenditure, that is an important matter. But other factors do come into the question from time to time; I do not deny that.

Mr. Adley

As there are today 1,463,465 human signs of the total and abject failure of the Government's economic policy, will the Prime Minister make up his mind either to chuck in the sponge to his Left wing and have a totally Socialist State or withdraw these irrelevant and damaging Bills currently before the House, so that, for once, the world may get the impression that the Labour Party is prepared to put nation before party?

The Prime Minister

I am glad to be able to reassure the hon. Gentleman that since this Government took office growing respect has been shown for this country by people abroad. The fact that the trade unions have given their assent to the wage agreement has had a very great impact, together with our determination to get public expenditure fully under control. I promise the hon. Gentleman, from my experience and contacts on these matters, that what is being done by the Labour Government is regarded as much more important than the bleatings of people like him.

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