HC Deb 25 July 1979 vol 971 cc601-4

Mr. Healey (by private notice) asked the Chancellor of the Exchequer whether he will make a statement on the further reductions in public expenditure agreed by Her Majesty's Government.

The Chief Secretary to the Treasury (Mr. John Biffen)

Not at this stage. Decisions on the expenditure plans for 1979–80 were announced in the Budget. The normal annual review of the plans for 1980–81 and later years is now in process. That review is not yet complete, but the Government hope to publish their decisions in the autumn.

Mr. Healey

Is the right hon. Gentleman aware that the country has been subjected to a blizzard of press leaks on a totally unprecedented scale? I speak as an expert when I use the expression. As the press has unanimously reported from Government sources, will the right hon. Gentleman confirm at least that six weeks after the Budget announcements the Government decided to increase the planned expenditure cuts for the next financial year by one-third, namely, by £1 billion, entirely because the Budget, by boosting inflation and unemployment, is increasing the public sector borrowing requirement? Does the right hon. Gentleman recognise that further public expenditure cuts such as those being discussed are bound to lead to still higher inflation, higher unemployment, more bankruptcies and a still higher public sector borrowing requirement?

Why does the right hon. Gentleman not accept the advice offered him today by the Financial Times editorial, namely, that he should accept that welfare payments act as a regulator in the economy and that to cut them at a time like this is damaging to the economy and highly savage and unfair to those concerned? Why does he not also agree with the Financial Times that the PSBR should be higher at a time when economic activity is lowered as a result of Government action?

Finally, can the right hon. Gentleman confirm two reports spread by himself or his colleagues—it is difficult even for experts in the field to identify precisely the source of the leaks—that the Department of the Environment is to require an in- crease of £2 a week in council rents next April? Does he not regard it as totally indefensible that the Prime Minister, facing such a situation, should refuse to consider reducing mortgage relief for higher-rate taxpayers?

Mr. Biffen

In no way can I be held responsible for the blizzard of leaks. If the right hon. Gentleman wishes to be blinded by them, that is his misfortune. Neither can I agree with the various premises on which he proposes alternative policies for the Government. He knows perfectly well that these issues were resolved at the last general election. Neither am I a puppet of the Financial Times, eagerly searching every editorial to discover what to do next.

If the right hon. Gentleman wants to know the broad thrust of our public spending policy, he can do no better than refer to the words of my right hon. Friend the Prime Minister yesterday, when she said that It is important that we reduce public expenditure as a proportion of the total national income. Our task at the moment is to constrain it."—[Official Report, 24 July 1979; Vol. 971, c. 345.]

Mr. Healey

Does not the right hon. Gentleman accept that, if he refers to the so-called mandate that the Conservative Party received at the last general election, when we told the country that, if elected, a Conservative Government would make savage cuts in public expenditure, he will find that the right hon. Lady advised Tory candidates to refer not to cuts in public expenditure but to trimming waste? Is he aware that on the Labour Benches at least we find it impossible, in July, to discover anyone who admits to having voted Conservative in May?

Mr. Biffen

To describe as a cut a policy that has as its broad objective the stabilisation of public expenditure is to demonstrate the myopia that is responsible for the position of this country today.

Mr. Speaker

Order. I propose to call one further speaker from each of the Liberal, Labour and Conservative Benches.

Mr. Richard Wainwright

Will the Chief Secretary show some sign of learning the lesson to which the previous Administration awoke too late, namely, that no party with or without a large parliamentary majority can effectively govern the country unless it deploys its policies to carry with it the great mass of the country? To that end, will the right hon. Gentleman expose his spending policies to the cut and thrust of debate in this House now, so that they can be understood by the country at large?

Mr. Biffen

We are committed to publish the White Paper on public spending in the autumn. We shall fulfil that commitment, and that is a good deal earlier than the timetable performance of our predecessors.

Mr. Eldon Griffiths

Will my right hon. Friend confirm that it is not a matter of cuts but of keeping the lid on the explosion in public expenditure that was set in train by the previous Administration? As private business, local authorities, nationalised industries and statutory undertakers are deeply concerned about this issue, will my right hon. Friend do his utmost to arrive at finality in his difficult task and make an announcement as quickly as possible?

Mr. Biffen

Certainly. We are in touch with the local authorities and other spending authorities. We hope to ensure that they are aware of what is expected of them in sufficient time for them to make the necessary changes in 1980–81.

Mr. Winnick

Will not the savage cuts to which the Chancellor of the Exchequer referred on Monday—not in the House—cripple essential services and cause untold harm and suffering? Is the right hon. Gentleman aware that the reaction of ordinary people is broadly the same—that this Government are like a curse upon the land?

Mr. Biffen

Language such as "savage cuts" and "untold harm and suffering" is rhetoric that is so remote from the realities of government today that it underlines the profound wisdom of the nation in putting the so-called Labour intellectuals on to the Opposition Benches.

Mr. Healey

Is the right hon. Gentleman aware that the main source of the leaks was the Chancellor of the Exchequer himself, when he was speaking on Monday at a private conference organised by the Financial Times? Is he aware that in that speech the Chancellor referred to the savagery of the cuts?

Mr. Biffen

It is absolutely nonsensical to describe the proposition that public sector spending, in real terms, should be stabilised as either a leak or a savage cut.