HC Deb 15 February 1979 vol 962 cc1298-301
13. Mr. Tim Renton

asked the Chancellor of the Exchequer whether, in the light of current wage settlements, he proposes to revise the public sector borrowing requirement figures for next year given in the Government expenditure White Paper; and, if so, when he will announce the details.

Mr. Joel Barnett

I have nothing at present to add to what my right hon. Friend told the House in the debate on 25th January.

Mr. Renton

Does the Chief Secretary remember that the Government borrowing requirement of £7.8 million that appeared in the White Paper was predicated on earnings increases of only 7 per cent. in the coming year? It was added that if earnings rose beyond that the Government's revenue would not rise as fast as Government expenditure. Bearing in mind that earnings look like rising by a figure in excess of 11 per cent., is the right hon. Gentleman committed to ensuring that the borrowing requirement next year is not in excess of the figure quoted in the White Paper?

Mr. Barnett

Yes.

Mr. Ridley

Is the right hon. Gentleman aware that in the deteriorating economic situation the worst way to deal with the problem is to continue to raise interest rates, which makes investment more expensive and growth and jobs more unlikely to be achieved in future? Does he accept that he should be curtailing public expenditure so that we may live within our means?

Mr. Barnett

I always find it remarkable that the Opposition are constantly telling us to curtail expenditure, as the hon. Gentleman puts it so delicately. They mean that we should cut public services—

Mr. Ridley

Yes.

Mr. Barnett

—when if anything they need to be improved. The hon. Gentleman says "Yes". The only public services that Conservatives talk about in the House are those on which they want an increased amount spent. If they would spell out where they want to see public services cut or charges made for them, we would be able to listen to them more carefully. They have never been credible and they continue to be incredible. When Opposition Members refer to a deteriorating economic situation, they are wrong. There is no sign yet that the pay out-turn will be as poor as the Opposition are so gleefully expecting. I hope that they will be with us in wanting to see a moderate pay outturn. That is what we are seeking to achieve.

Mr. Cryer

Would my right hon. Friend care to comment on the hypocrisy of the Opposition? Is he aware that they talk about cutting public expenditure in a variety of ways but run an advertising campaign criticising the National Health Service? They queue up eagerly at every Government Department to ask for more money for industry or public services within their constituencies.

Mr. Barnett

I could not agree more with my hon. Friend. He knows how much I like to agree with him. It does not happen too often, so I am glad to have the chance. As I have said, my hon. Friend is right. However, I would not want to use his language. He knows how moderate I am on these matters. However, on this occasion I go even further and say how hypocritical the Opposition are in their demands for increased expenditure on almost every subject for which I am responsible.

Mr. Lawson

The House will have noticed the Chief Secretary showing all the bluster of a deeply worried man, as well he may be as he has reiterated the pledge given by the Chancellor that the public sector borrowing requirement for the coming year will not exceed the figure in the White Paper, which is £8½ billion in money terms. Is he not aware that the prospect now, if no changes are made, is something substantially in excess of that figure, in which case the Government are bound either to cut public expenditure or increase taxation? Which is it to be?

Mr. Barnett

I am sorry that the hon. Gentleman takes a view of what he sees that is different from that taken by other hon. Members. It seems a pity that there are not cameras around the Chamber to portray just how worried I look. The hon. Gentleman asks what we shall do to meet our borrowing requirement target. I hope that the hon. Gentleman accepts that neither he nor anybody else knows yet what it will be for next year. We do not know what the pay out-turn will be. My right hon. Friend has indicated what it might be in certain hypothetical circumstances, but it is far too early to jump to the conclusion that we shall have the gloomy out-turn that the Opposition are so happy to prognosticate.

Mr. Ridley

On a point of order, Mr. Speaker. Following the Chief Secretary's answer to this question, I give notice that at the earliest possible opportunity I shall seek to raise the matter on the Adjournment.