Public Expenditure (Hansard, 24 January 1980)

§ 8. Mr. Higgins
asked the Chancellor of the Exchequer what plans he has now for reduction in public expenditure.

§ 10. Mr. Latham
asked the Chancellor of the Exchequer whether he will make a further statement on public expenditure.

§ 18. Mr. Bruce-Gardyne
asked the Chancellor of the Exchequer when he now expects to publish the public expenditure White Paper.

§ Mr. Biffen
Further decisions on our review of public expenditure will be announced in due course. We expect that the public expenditure White Paper will be published in March.

§ Mr. Higgins
While welcoming the Government's recognition that total public expenditure in real terms must be cut substantially, and that, therefore, the 1980–81 White Paper must be scrapped, may I ask my right hon. Friend to give an assurance that the forthcoming White Paper will have a full economic analysis of the normal kind which covers the whole area which the White Paper embraces?

§ Mr. Biffen
An economic analysis will certainly be published with the White Paper, and I hope that it will satisfy my right hon. Friend.

§ Mr. Latham
What is now the primary aim of Government policy on public expenditure and the PSBR? Is it to force down interest rates or is it to make room for further tax cuts?

§ Mr. Biffen
Clearly, over the lifetime of this Parliament, it will be our policy to trim public spending to enable both reductions in taxation and a fall in interest rates to take place.

§ Mr. Bruce-Gardyne
Is it not apparent that the £8.3 billion target for the PSBR this year will be exceeded? Can my right hon. Friend assure us that that will be taken into account in reducing the scale of the PSBR next year? Further, can he assure us that reports in some newspapers last weekend, which stated that he said that the objective was to secure a £2,000 million reduction in planned expenditure programmes by the end of this Parliament, underestimated the scale of his personal ambitions?

§ Mr. Biffen
Perhaps we can leave my personal ambitions to one side so as to enable me to deal with the£8.3 billion PSBR forecast for the current year. I cannot comment as to what will be the outcome figure, but I can assure my hon. Friend that that outcome figure will be very much present in the mind of my right hon. and learned Friend the Chancellor when constructing both his budget and the public spending proposals.

§ Mr. Frank Allaun
Did not the Chief Secretary say last weekend that the Government were now considering proposals to ignore inflation with regard to unemployment and social security benefits as well as child benefits? Does not that mean that this year there will be a deliberate cut of about 18 per cent. in those levels, with a further cut next year and so long as inflation continues? That is something which no British Government have done since 1931.

§ Mr. Biffen
It is certainly true that the Government are conducting a wide-ranging review of public spending. But nothing that is being contemplated in that review merits the interpretation which the hon. Gentleman has just placed upon it.

§ Mr. Heffer
Is it not clear that the British people must fear the Conservative militants and fanatics, and that if the Government continue with their policy of cutting public expenditure, not only will there be de-industrialisation but the people will end up in dire poverty? Is it not about time that Conservative Members faced the fact that the Government's policy is leading to utter disaster?

§ Mr. Biffen
I am happy to assure the the hon. Gentleman that we Conservatives 634 are Nature's moderates. However, we are also Nature's realists with regard to economic planning. The fact is that we inherited a public spending programme that was wildly in excess of any likely economic performance by this country.

§ Mr. Farr
Can my right hon. Friend say whether the public expenditure White Paper will deal with the effect of index-linked public sector pensions and whether it will make any recommendations to deal with that problem?

§ Mr. Biffen
Those are obviously the kind of issues that are under review, but in no sense can I anticipate the outcome of that White Paper.

§ Mr. John Garrett
Further to the right hon. Gentleman's answer to the supplementary question of my hon. Friend the Member for Salford, East (Mr. Allaun), is it not clear that further reductions in public expenditure will come from reduced social benefits, from failure to uprate benefits and from direct reductions in social benefits and pensions? Will not such cuts fall disproportionately and crucially heavily upon claimants and pensioners? Should not the right hon. Gentleman make that quite clear to the country?

§ Mr. Biffen
I do not deny that there is a wide-ranging review of public spending policy. In those circumstances, all programmes must be subject to investigation. Any final decision must be a balance of social and economic judgment, dictated primarily by political considerations.