HC Deb 04 March 1976 vol 906 cc1512-4
6. Mr. Walter Johnson

asked the Chancellor of the Exchequer if he will now slow down the phasing out of subsidies to the nationalised industries.

Mr. Dell

I have nothing to add to the reply I gave my hon. Friend on 18th December 1975.

Mr. Johnson

Is my right hon. Friend aware that this policy is having a disastrous effect upon the Post Office and the railways, forcing them to raise their charges to a level that is now causing massive customer resistance? Surely it is now time to review this policy, for otherwise the services will be run down and there will be further unemployment in these industries.

Mr. Dell

I think that the Post Office unions have supported our policies regarding the Post Office. We are continuing to subsidise the railways, but there is a limit to the extent that one can subsidise a service. I think that we are maintaining a fair balance in this respect.

Mr. Newton

Is the Minister aware that the increases in commuter rail fares are having a very serious effect on people who are already hard hit by taxation increases? Will he at least undertake that the interests of this group will be properly taken into account in the Budget?

Mr. Dell

I cannot anticipate my right hon. Friend's Budget Statement. In maintaining services which benefit from subsidies we have to keep some sense of balance, and the country just cannot afford to subsidise any service irrespective of the cost.

Mr. Raphael Tuck

If we phase out these subsidies, is it not right that the increases in prices will trigger off a spate of wage demands, which is exactly what we are trying to avoid?

Mr. Dell

That is one aspect of the matter that the Government must keep in mind. None the less, it cannot be sensible in present circumstances to continue to subsidise energy prices. That is the position that the Government have been explaining. I think that it is understood that it is an inevitable fact about our present situation.

Mr. Nott

I welcome that reply, but will the Paymaster-General publish, perhaps at the time of the Budget, details of the extent to which nationalised industries are now financing capital expenditure out of revenue and the way in which the self-financing ratio—if I may call it that—has been moving over the past few years? The subsidies can be dwarfed by the degree to which nationalised industries are financing capital expenditure out of revenue. How has this been moving over the years?

Mr. Dell

We shall consider what information the hon. Gentleman can be given. The general position of the Government is that we wish the self-financing ratio to be increased in order to reduce Government borrowing.