HC Deb 09 April 1981 vol 2 cc1193-204

There were a number of inexcusable errors in Labour's televised party election broadcast on Friday, which I would like to correct. We have absolutely no intention of doubling VAT."

The right hon. and learned Gentleman continued: So all the claims made about the price of household goods, shoes, cars etc., are utterly false.… Issued by Publicity Department, Conservative Central Office, 32 Smith Square In that statement, the Chancellor made—to use his own words—an inexcusable error. In the two years since then, his whole tenure of office has been an inexcusable error. That is why we shall vote against him and his White Paper tonight.

9.30 pm
The Financial Secretary to the Treasury (Mr. Nigel Lawson)

I can best describe the speech of the right hon. Member for Manchester, Ardwick (Mr. Kaufman)—this applies in particular to his final remarks—as grandiloquent and meaningless. Perhaps that is not so surprising, because I have here a little red book containing useful advice for those who speak from the Dispatch Box. On page 95 of that book it says: Your final paragraphs should be grandiloquent, even if almost meaningless". The author of the book is, of course, none other than the right hon. Member for Ardwick. Certainly no one, at least in this respect, can accuse him of not practising what he preaches.

Mr. Kaufman

Would the right hon. Gentleman please be good enough to name the publisher and the price?

Mr. Lawson

Whatever the price, the book is worth a great deal more than the speech that we heard from the right hon. Gentleman.

The right hon. Gentleman tried to make great play with the fact that the trends in central Government and local authority spending have somehow been different, as if local authorities have been discriminated against. What he may not know—because he is a newcomer in this field—is that some two-thirds of all public expenditure is taken up by five main programmes—social security, defence, health, housing and education.

For demographic reasons, social security spending is rising. For policy reasons, defence spending is rising. Also for policy reasons, health expenditure is rising. That was the commitment that we gave. By contrast, we said clearly that expenditure on education, again for demographic reasons—among others—and housing—because there is a flourishing private sector—would be cut.

It is a matter of fact that the social security programme, the defence programme and the health programme come under central Government, whereas expenditure on education and housing comes under local government. That is the reason for the differing trends in local government and central Government, and there is no way in which there has been any discrimination against local government, as such.

Mr. Mike Thomas

rose

Mr. Lawson

The general picture painted by Labour Members, as far as one can judge from most of the speeches—and I have been present during most of the debate—is that public expenditure has been cut savagely and that virtually all that is left is benefits for the unemployed. That is the sort of picture that we have been given. That is the caricature, but what is the reality?

The reality is that public expenditure in the coming year is expected to run at about £110,000 million. That is about £5,500 a year for every family in the land. Of that, only 3p in every pound is spent on benefits for the unemployed, and that includes supplementary benefit.

Indeed, it is hard not to be struck by the very marked discrepancy that exists between the sour and dismal comments on both the Budget and the public expenditure White Paper that we have heard from Labour Members, and the dispassionate verdict of the markets, which the right hon. Member for Leeds, East (Mr. Healey), when he was Chancellor of the Exchequer, was always so fond of quoting, as his right hon. Friend the Member for Heywood and Royton (Mr. Barnett) will remember. I am not quite sure what has happened to the right hon. Member for Leeds, East. He is not in his place now. We do not see him so much these days.

Since the Budget, while sterling has remained virtually unchanged the gilt-edged market has taken on a new lease of life, absorbing very large quantities of Government stock, in addition to the new indexed gilt, which judiciously began its life at precisely par, while the equity market has reached a new all-time high.

What is interesting in particular is that the surge in equities has been led by industrial shares. So much for the allegation of the gang of 364 that our industrial base was being destroyed. I also throw in, as an aside for my hon. Friends, that even bank shares have risen since the Budget. Industrial shares have risen considerably more.

The House is greatly indebted to the Select Committee on the Treasury and Civil Service, under the distinguished chairmanship of my right hon. Friend the Member for Taunton (Mr. du Cann), who yesterday brought out a brief report on the Budget and the public expenditure White Paper, which has been widely alluded to in the debate.

The House is equally indebted to the Committee for the press conference that it held yesterday, which helped to put that report in its proper perspective. The Committee devoted a large part of its report to an absorbing—at least I found it absorbing—discussion of some remarks that I made last month at a gathering of the Institute for Fiscal Studies. It suggested that in the light of those remarks the Government should take the opportunity, in this debate, to spell out more fully their view on the relationship between monetary growth and the growth of real output in the economy. The right hon. Member for Stepney and Poplar (Mr. Shore) specifically asked me whether I would deal with that and I promised him that I would do so.

The Government's economic strategy starts from the undeniable fact that there is a clearly discernible medium-term relationship between the growth of the money supply and the growth of output in money terms. To be precise, output as measured in money terms tends to grow at between 1 per cent. and 2 per cent. more than the money supply. In an abnormal year it can diverge from that, sometimes quite considerably. But it always subsequently comes back on trend. There is no reason to suppose that the coming year will be one of those abnormal years; nor did the Committee's report suggest any reaon why it should be.

Our central target for the growth of money supply over the coming year is 8 per cent. That would imply a growth in output, in money terms, of between 9 per cent. and 10 per cent., so the question that arises—[Interruption.]—I hope that hon. Gentlemen will listen, because the right hon. Member for Stepney and Poplar specifically asked me to deal with this in my reply—is how much of the 9 per cent. to 10 per cent. growth in output, in money terms, is simply a reflection of inflation, and what will happen to output in real terms.

It is true that a 10 per cent. growth in nominal output, for example, could be composed of a 5 per cent. growth in real output and a 5 per cent. growth in prices or a 5 per cent. fall in real output and 15 per cent. inflation, or any other combination that adds up to 10 per cent.

However, we have published our best guess as to the rate of inflation over the coming year. It is published in the Red Book, and we see it falling to 10 per cent. in six months' time and 8 per cent. in a year from now. Despite its profound, not to say at times obsessive, interest in short-term forecasting, the Treasury and Civil Service Committee does not dispute those figures, which are well in line with the majority of outside forecasts.

Given this rate of inflation, there is clearly nothing contractionary whatever about the present stance of Government policy. That conclusion is in no way affected by a Budget which increased taxation to pay for increased Government spending. Indeed, given this prospect for inflation over the coming year, the Government's monetary target allows room for a gradual increase in real output over the latter part of the year. That is what we expect to occur, and the figures that we are forecasting are published in the Red Book. That is the argument that I was advancing in my speech to the Institute for Fiscal Studies in which the Committee showed so much interest.

I see that my right hon. Friend the Member for Worthing (Mr. Higgins) is paying particular attention: I know his deep interest, although he did not contribute to the debate today.

The Committee became slightly confused when it extrapolated from that argument and implied that I was suggesting that over the medium and longer term the rate of monetary growth would determine the level of real output. Had Members of the Committee read my speech more carefully, or had they had the pleasure of attending the meeting, they would have realised that I suggested nothing of the sort. Indeed, it would have been astonishing if I had. The belief that the growth of monetary demand—whether engineered by deficit spending or any other way—determines the growth of real output is the very essence of the neo-Keynesian error which led to the inflationary disaster of the 1970s and which this Government have explicitly disavowed.

Our contention is that while in the short term an expansion in the money supply can give a boost to real output, in the medium and longer term it has no positive effect on output. All that it does is to increase prices. By contrast, we believe that the real level of output is determined in the long run by real and not monetary factors. That should not be so surprising. It is determined by the productivity and efficiency of industry, by the effective working of markets, by the behaviour of trade unions, by the performance of management and by the hard work, energy and enterprise of the British people.

Needless to say, none of this in any way implies that the Government's medium-term financial strategy is contractionary, as the Committee appears to believe. That is because as inflation continues to moderate over the years the declining rate of money supply growth implied by the medium-term financial strategy allows ample scope for a continuing growth of output.

It is true that a dramatic break in inflationary expectations which is the essential first step in the battle against inflation—and a step which we have achieved—sadly but invariably requires a decline in the real money supply and thus some decline in output. But it is an illusion to suppose that continued success in the battle against inflation requires monetary growth to be continually below the current level of inflation.

What is required, however, is widespread recognition that should there for any reason, internal or external, at any time be an inflationary surge in the economy, the Government of the day will not accommodate that surge by printing more money.

Mr. Shore

The House has listened to an extraordinary academic and theoretical exposition of hypotheticals dealing with anticipated rates of growth, of money supply and inflation. The real world was lost. Will the Financial Secretary now turn his attention to the matter which is of great interest to us all? Is the Budget in its general effect deflationary, as was broadly concluded by the Select Committee, or is he seriously trying to argue that because of the relationship between the anticipated growth in the money supply and the anticipated growth of monetary income fiscal deflation does not matter?

Mr. Lawson

I have already dealt with that in language which I tried to make as simple as possible for the benefit of the right hon. Member for Stepney and Poplar. I made it far more simple than the esoteric language of some of the papers produced by the Select Committee. The hon. Member for Motherwell and Wishaw (Dr. Bray), who was a distinguished member of the committee on policy optimisation, brings in mathematics and diagrammatic explanations at the drop of a hat. I would certainly not dream of doing that to this House or any other forum.

Dr. Bray

I regret not having had the distinction of serving on the committee on policy optimisation. Is the Financial Secretary, in his explanation tonight and in the explanation given in his paper to the Institute for Fiscal Studies, which I read carefully, saying that there is a unique relationship between the money supply and its inflation and output effects later? Or is he acknowledging that there is also a fiscal effect, which, in the context of the present. Budget, has been savagely deflationary?

Mr. Lawson

I apologise for saying that the hon. Gentleman was a member of the committee on policy optimisation. He merely inspired the committee, but was not actually a member of it. I should like to read what I said at the Institute for Fiscal Studies. I said: The truth is that the reduction in the PSBR brought about by the Budget is unlikely to make much overall difference to the total level of demand. In the short term, there may be some very modest contractionary effect That is what I said. Anyone who read the speech would have discovered it. I also said: But the more important point is that, taking full account of the Budget, we expect output to be on a rising trend during 1981–82 That is the year ahead.

I suggested, too, reasons why that was likely. I identified, for example, three of the main elements in the recession that we have seen—the massive wave of destocking, the sharp increase in the savings ratio, and the world recession. Over the coming year, the prospect is that these three elements will be working in the opposite direction. The rate of destocking is likely to decline as inventories reach the desired lower level. The savings ratio is likely to fall as inflation and inflationary expectations subside. There is generally expected to be some upturn in the world economy. We have the encouraging behaviour of the economic indicator series published by the Central Statistical Office, with a proven track record. All are now clearly signalling a turning point in the economy.

Despite that, the Treasury and Civil Service Committee was worried. In his speech today my right hon. Friend the Member for Taunton echoed that worry. The Committee said: It is hard to discern any engine of sustained recovery". The word "engine" is surely the great give-away. It implies that there is some great mechanism of economic growth that will deliver the goods provided only that the Government of the day intervene to press the right buttons and pull the appropriate levers. The truth is that there is no such mechanism. The previous Government, particularly the Treasury team of which the right hon. Member for Heywood and Royton was a member, well understood this. The only engine of economic growth—

Mr. Peter Tapsell (Horncastle)

rose

Mr. Lawson

I will give way later. The only engine of economic growth is what Keynes referred to as the animal spirits of the people. Out in the real economy, it is clear that those animal spirits are vigorously at work. Anyone who speaks to those involved in industry and to business men will discover this fact for themselves.

I was interested to read on the front page of The Sunday Times Business News last week an article by Mr. Roger Eglin, a reporter whose ear has always been close to the ground. He wrote: What amounts to a sea-change is going on in industry, but not surprisingly it has largely gone unpublicised The article went on: Yet though this recession has wiped out one in every 10 manufacturing industry jobs, the idea that industry has been done irreparable damage doesn't stand serious examination. In fact the reverse is probably true.

Mr. Tapsell

If Government action can produce a recession, why is it that it cannot produce the opposite? Secondly, why has my right hon. Friend devoted almost his entire speech to proving that this Budget is not deflationary if the object of the whole exercise is to conquer inflation?

Mr. Lawson

The word "deflation" is particularly misleading, which is why I used the term "contractionary". I said that this Budget was not contractionary. Of course its whole purpose is to conquer inflation. Indeed, that has been the purpose of my right hon. and learned Friend's previous Budgets, and considerable success has been achieved on that front, as my hon. Friends are well aware.

There were a number of other contributions from those of my hon. Friends—[HON. MEMBERS: "Answer the question".] I have answered the question. Unfortunately, I was not in the Chamber to hear the speech of my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). However, I was given an account of what he said, and I agree with every word.

I had the privilege of listening to my hon. Friend the Member for Enfield, North (Mr. Eggar), who was another member of that distinguished Treasury and Civil Service Committee. He made a notably honest speech. Like many of my hon. Friends, he said that it was no good simply calling for cuts in public expenditure on current account in order to make room for increases in expenditure on capital account. Many of my hon. Friends wish to see that, although they have made it quite clear that they are not calling for an increase in public expenditure overall. But it is no use doing that unless one addresses oneself to the sort of cuts in current expenditure which would be required.

My hon. Friend the Member for Enfield, North underlined the difficulty of doing that. He made certain suggestions, as did my right hon. Friend the Member for Taunton. That is helpful. In last year's public expenditure debate I had the temerity to suggest that perhaps the most helpful thing which the Treasury and Civil Service Committee could do would be to make suggestions about where the cuts in current expenditure might be found in order to make way for increased capital expenditure which was worth while. I entirely agree with my right hon. and learned Friend that by no means all capital expenditure is worth while. In fact, some of the most conspicuous examples of waste in the public sector are to be found in capital expenditure. I hope that those suggestions will be forthcoming.

The right hon. Member for Stepney and Poplar asked me to confirm the CBI figure that a reduction in debt interest of 1 per cent. would produce a public expenditure saving of £250 million. That figure is of the right order of magnitude. Our best calculations estimate that there would be a saving of between £200 million and £250 million.

However, if the right hon. Gentleman's policies were to be followed, and if public expenditure and the borrowing requirement were substantially increased, interest rates would have to rise substantially as well. That would mean that the cost of debt interest would substantially increase.

Mr. Shore

Rubbish.

Mr. Lawson

It is no use the right hon. Gentleman saying "Rubbish". Perhaps he does not realise the importance of cutting public expenditure as keenly as his right hon. Friend the Member for Heywood and Royton, who had responsibility in this regard. I should like to read what the right hon. Gentleman had to say to his friends in an article in The Guardian some 18 months ago. He said: For Labour's view to be credible, the sooner we face up to the need for some cuts, the better. Until the right hon. Gentleman has faced that, too, he will not be credible.

Mr. Shore

What is surely extraordinary to most people of average sense is that the Government should be pursuing a policy of containing public expenditure in the middle of the worst recession that this country has experienced in the past 50 years. If he really tries to argue that, with the public sector borrowing requirement at a lower percentage of GDP than it has been in any of the last 10 years, it is impossible to borrow money without raising interest rates, he had better have a word with his right hon. Friend the Member for Taunton (Mr. du Cann).

Mr. Lawson

I think that the right hon. Gentleman ought to have a word with his right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), who, when he was leader of the Labour Party and Prime Minister, explained at some length at a Labour Party conference in 1976, I think it was—at which I assume the right hon. Gentleman the Member for Stepney and Poplar was present—that there was no way in which we could spend ourselves out of a recession; all that we did was to spend ourselves into inflation. The right hon. Member for Heywood and Royton knows that, and until the right hon. Member for Stepney and Poplar understands it he will be no fit aspirant for any high office.

The right hon. Member for Stepney and Poplar made a similar speech, of course, in the Budget debate. He was answered very effectively by the hon. Member for Gateshead, West (Mr. Horam), who is one of the more informed Members of the Social Democratic Party. I would rather refer to what he said than to what the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said. He said: the proposals of the right hon. Member for Stepney and Poplar (Mr. Shore) were over-egging the pudding with a vengeance. He would gorge us on reflation to an extent which would lead to the spiralling inflation we had in the first two years of the last Labour Government."—[Official Report, 16 March 1981; Vol. 1 c. 60–1.] That is right. He has learnt nothing. I give the hon. Member for Gateshead, West his due; he is an adornment to his new party. He said this in an article in The Spectator recently: The Left may have been wrong and are now not only wrong but sadly dated, but they were at least addressing the problem. Mrs. Thatcher has in her way addressed the problem. The people who did not were the old-style Social Democrats who ran the Callaghan Government. What he is now doing among the old-style Social Democrats, I am not quite sure.

Mr. Mike Thomas

Would the right hon. Gentleman care to explain the point that I raised with him, namely, how it is that his Government, while saying that they are cutting public expenditure, are increasing it; while saying that they are cutting taxation, have in fact increased the burden of taxation by 20 per cent. of GDP since they came into office, and at the same time are managing to cut, in real terms, services to the elderly, the homeless, the sick, the handicapped, the disabled and every other group?

Mr. Lawson

That is quite untrue. In the Budget we made a substantial increase in the mobility allowance, in real terms. There have been various other increases in help for the disabled that my right hon. and learned Friend the Chancellor of the Exchequer introduced in his Budget and to which he devoted a section of his Budget Statement.

The truth is that right hon. and hon. Gentlemen have no solution other than printing and borrowing, and evermore inflation. Indeed, when the right hon. Member for Stepney and Poplar says that borrowing finances itself—something echoed by the hon. Member for Grimsby (Mr. Mitchell)—I wonder why he does not abolish taxation altogether. If borrowing automatically finances itself, why not finance everything by borrowing? There would be no need to have any taxation at all. The right hon. Member for Stepney and Poplar should learn a bit about what he is trying to lecture the House on before he lectures us again.

I commend the White Paper to the House.

Question put, That the amendment be made:—

The House divided: Ayes 232, Noes 300.

Division No. 152] [10 pm.
AYES
Adams, Allen Davis, T. (B'ham, Stechf'd)
Allaun, Frank Dean, Joseph (Leeds West)
Alton, David Dempsey, James
Anderson, Donald Dewar, Donald
Archer, Rt Hon Peter Dixon, Donald
Ashley, Rt Hon Jack Dobson, Frank
Ashton, Joe Dormand, Jack
Atkinson, N (H'gey,) Douglas, Dick
Barnett, Guy (Greenwich) Douglas-Mann, Bruce
Barnett, Rt Hon Joel (H'wd) Dubs, Alfred
Beith, A. J. Dunn, James A.
Bennett, Andrew(St'kp't N) Dunnett, Jack
Bidwell, Sydney Dunwoody, Hon Mrs G.
Booth, Rt Hon Albert Eastham, Ken
Boothroyd, Miss Betty Edwards, R. (W'hampt'n S E)
Bradley, Tom Ellis, R. (NE D'bysh're)
Bray, Dr Jeremy Ellis, Tom (Wrexham)
Brocklebank-Fowler, C. English, Michael
Brown, Hugh D. (Provan) Ennals, Rt Hon David
Brown, R. C. (N'castle W) Evans, Ioan (Aberdare)
Callaghan, Rt Hon J. Evans, John (Newton)
Callaghan, Jim (Midd't'n & P) Field, Frank
Campbell, Ian Fitch, Alan
Campbell-Savours, Dale Fitt, Gerard
Canavan, Dennis Flannery, Martin
Cant, R. B. Fletcher, Raymond (Ilkeston)
Carmichael, Neil Fletcher, Ted (Darlington)
Cartwright, John Foot, Rt Hon Michael
Clark, Dr David (S Shields) Ford, Ben
Cocks, Rt Hon M. (B'stol S) Forrester, John
Cohen, Stanley Foster, Derek
Coleman, Donald Foulkes, George
Concannon, Rt Hon J. D. Fraser, J. (Lamb'th, N'w'd)
Conlan, Bernard Freeson, Rt Hon Reginald
Cook, Robin F. Freud, Clement
Cowans, Harry Garrett, John (Norwich S)
Craigen, J. M. Garrett, W. E. (Wallsend)
Crawshaw, Richard George, Bruce
Crowther, J. S. Gilbert, Rt Hon Dr John
Cryer, Bob Ginsburg, David
Cunliffe, Lawrence Golding, John
Cunningham, G. (Islington S) Gourlay, Harry
Dalyell, Tam Graham, Ted
Davidson, Arthur Grant, George (Morpeth)
Davies, Rt Hon Denzil (L'lli) Hamilton, W. W. (C'tral Fife)
Davies, Ifor (Gower) Harrison, Rt Hon Walter
Davis, Clinton (Hackney C) Hart, Rt Hon Dame Judith
Hattersley, Rt Hon Roy Prescott, John
Haynes, Frank Price, C. (Lewisham W)
Healey, Rt Hon Denis Race, Reg
Heffer, Eric S. Radice, Giles
Hogg, N. (E Dunb't'nshire) Rees, Rt Hon M (Leeds S)
Home Robertson, John Richardson, Jo
Homewood, William Roberts, Albert (Normanton)
Horam, John Roberts, Allan (Bootle)
Howell, Rt Hon D. Roberts, Ernest (Hackney N)
Hughes, Mark (Durham) Roberts, Gwilym (Cannock)
Hughes, Robert (Aberdeen N) Robertson, George
Hughes, Roy (Newport) Robinson, G. (Coventry NW)
Janner, Hon Greville Rodgers, Rt Hon William
Jay, Rt Hon Douglas Rooker, J. W.
John, Brynmor Roper, John
Johnson, Walter (Derby S) Ross, Ernest (Dundee West)
Jones, Rt Hon Alec (Rh'dda) Ross, Stephen (Isle of Wight)
Jones, Barry (East Flint) Rowlands, Ted
Jones, Dan (Burnley) Ryman, John
Kaufman, Rt Hon Gerald Sever, John
Kerr, Russell Sheerman, Barry
Kilroy-Silk, Robert Sheldon, Rt Hon R.
Lamborn, Harry Shore, Rt Hon Peter
Lamond, James Short, Mrs Renée
Leadbitter, Ted Silkin, Rt Hon J. (Deptford)
Leighton, Ronald Skinner, Dennis
Lewis, Arthur (N'ham NW) Smith, Rt Hon J. (N Lanark)
Lewis, Ron (Carlisle) Snape, Peter
Litherland, Robert Soley, Clive
Lofthouse, Geoffrey Spearing, Nigel
Lyon, Alexander (York) Spriggs, Leslie
Lyons, Edward (Bradf'd W) Stallard, A. W.
Mabon, Rt Hon Dr J. Dickson Stewart, Rt Hon D. (W Isles)
McCartney, Hugh Stoddart, David
McDonald, Dr Oonagh Stott, Roger
McElhone, Frank Strang, Gavin
McKay, Allen (Penistone) Straw, Jack
McKelvey, William Summerskill, Hon Dr Shirley
MacKenzie, Rt Hon Gregor Thomas, Jeffrey (Abertillery)
Maclennan, Robert Thomas, Mike (Newcastle E)
McTaggart, Robert Thomas, Dr R (Carmarthen)
McWilliam, John Thorne, Stan (Preston South)
Magee, Bryan Tilley, John
Marks, Kenneth Tinn, James
Marshall, D (G'gow S'ton) Torney, Tom
Marshall, Dr Edmund (Goole) Urwin, Rt Hon Tom
Marshall, Jim (Leicester S) Varley, Rt Hon Eric G.
Martin, M(G'gow S'burn) Wainwright, E.(Dearne V)
Maxton, John Wainwright, R.(Colne V)
Meacher, Michael Weetch, Ken
Millan, Rt Hon Bruce Wellbeloved, James
Miller, Dr M. S. (E Kilbride) Welsh, Michael
Mitchell, R. C. (Soton Itchen) White, Frank R.
Morris, Rt Hon C. (O'shaw) White, J. (G'gow Pollok)
Morris, Rt Hon J. (Aberavon) Whitehead, Phillip
Morton, George Whitlock, William
Moyle, Rt Hon Roland Wigley, Dafydd
Mulley, Rt Hon Frederick Willey, Rt Hon Frederick
Newens, Stanley Williams, Rt Hon A. (S'sea W)
Oakes, Rt Hon Gordon Wilson, Gordon (Dundee E)
Ogden, Eric Wilson, Rt Hon Sir H. (H'ton)
O'Halloran, Michael Wilson, William (C'try SE)
O'Neill, Martin Winnick, David
Orme, Rt Hon Stanley Woodall, Alec
Owen, Rt Hon Dr David Woolmer, Kenneth
Palmer, Arthur Wrigglesworth, Ian
Parker, John Young, David (Bolton E)
Pavitt, Laurie
Pendry, Tom Tellers for the Ayes:
Penhaligon, David Mr. Austin Mitchell and
Powell, Raymond (Ogmore) Mr. James Hamilton.
NOES
Adley, Robert Aspinwall, Jack
Aitken, Jonathan Atkins, Rt Hon H.(S'thorne)
Alexander, Richard Atkins, Robert(Preston N)
Alison, Michael Atkinson, David (B'm'th,E)
Amery, Rt Hon Julian Baker, Nicholas (N Dorset)
Ancram, Michael Banks, Robert
Arnold, Tom Beaumont-Dark, Anthony
Bell, Sir Ronald Fraser, Peter (South Angus)
Bendall, Vivian Fry, Peter
Benyon, Thomas (A'don) Galbraith, Hon T. G. D.
Benyon, W. (Buckingham) Gardiner, George (Reigate)
Best, Keith Gardner, Edward (S Fylde)
Bevan, David Gilroy Garel-Jones, Tristan
Biffen, Rt Hon John Gilmour, Rt Hon Sir Ian
Biggs-Davison, John Glyn, Dr Alan
Blackburn, John Goodhart, Philip
Blaker, Peter Goodlad, Alastair
Body, Richard Gorst, John
Bonsor, Sir Nicholas Gow, Ian
Boscawen, Hon Robert Gower, Sir Raymond
Bottomley, Peter (W'wich W) Gray, Hamish
Bowden, Andrew Greenway, Harry
Boyson, Dr Rhodes Grieve, Percy
Braine, Sir Bernard Griffiths, E (B'ySt. Edm'ds)
Bright, Graham Griffiths, Peter Portsm'th N)
Brinton, Tim Grist, Ian
Brittan, Leon Grylls, Michael
Brooke, Hon Peter Gummer, John Selwyn
Brotherton, Michael Hamilton, Hon A.
Brown, Michael(Brigg & Sc'n) Hamilton, Michael (Salisbury)
Browne, John (Winchester) Hampson, Dr Keith
Bruce-Gardyne, John Haselhurst, Alan
Bryan, Sir Paul Havers, Rt Hon Sir Michael
Buchanan-Smith, Alick Hawkins, Paul
Buck, Antony Hayhoe, Barney
Budgen, Nick Heddle, John
Burden, Sir Frederick Henderson, Barry
Butcher, John Heseltine, Rt Hon Michael
Butler, Hon Adam Hicks, Robert
Cadbury, Jocelyn Higgins, Rt Hon Terence L.
Carlisle, John (Luton West) Hill, James
Carlisle, Kenneth (Lincoln) Hogg, Hon Douglas (Gr'th'm)
Carlisle, Rt Hon M. (R'c'n) Holland, Philip (Carlton)
Chalker, Mrs. Lynda Hooson, Tom
Chapman, Sydney Hordern, Peter
Churchill, W. S. Howe, Rt Hon Sir Geoffrey
Clark, Hon A. (Plym'th, S'n) Howell, Rt Hon D. (G'ldf'd)
Clark, Sir W. (Croydon S) Howell, Ralph (N Norfolk)
Clarke, Kenneth (Rushcliffe) Hunt, David (Wirral)
Clegg, Sir Walter Hunt, John (Ravensbourne)
Cockeram, Eric Irving, Charles (Cheltenham)
Colvin, Michael Jenkin, Rt Hon Patrick
Cope, John Johnson Smith, Geoffrey
Cormack, Patrick Jopling, Rt Hon Michael
Corrie, John Joseph, Rt Hon Sir Keith
Costain, Sir Albert Kaberry, Sir Donald
Cranbome, Viscount Kellett-Bowman, Mrs Elaine
Critchley, Julian Kimball, Marcus
Crouch, David King, Rt Hon Tom
Dickens, Geoffrey Kitson, Sir Timothy
Dorrell, Stephen Knight, Mrs Jill
Douglas-Hamilton, Lord J. Knox, David
Dover, Denshore Lamont, Norman
du Cann, Rt Hon Edward Lang, Ian
Dunn, Robert (Dartford) Langford-Holt, Sir John
Durant, Tony Latham, Michael
Dykes, Hugh Lawson, Rt Hon Nigel
Eden, Rt Hon Sir John Lee, John
Edwards, Rt Hon N. (P'broke) Lennox-Boyd, Hon Mark
Eggar, Tim Lester, Jim (Beeston)
Elliott, Sir William Lewis, Kenneth (Rutland)
Emery, Peter Lloyd, Peter (Fareham)
Eyre, Reginald Loveridge, John
Fairbairn, Nicholas Luce, Richard
Fairgrieve, Russell Lyell, Nicholas
Faith, Mrs Sheila Macfarlane, Neil
Farr, John MacGregor, John
Fell, Anthony MacKay, John (Argyll)
Fenner, Mrs Peggy McNair-Wilson, M. (N'bury)
Finsberg, Geoffrey McNair-Wilson, P. (New F'st)
Fisher, Sir Nigel McQuarrie, Albert
Fletcher-Cooke, Sir Charles Madel, David
Fookes, Miss Janet Major, John
Forman, Nigel Marland, Paul
Fowler, Rt Hon Norman Marlow, Tony
Fox, Marcus Mates, Michael
Fraser, Rt Hon Sir Hugh Mather, Carol
Mawby, Ray Peyton, Rt Hon John
Mawhinney, Dr Brian Pink, R. Bonner
Maxwell-Hyslop, Robin Porter, Barry
Mayhew, Patrick Powell, Rt Hon J.E. (S Down)
Mellor, David Prentice, Rt Hon Reg
Meyer, Sir Anthony Price, Sir David (Eastleigh)
Miller, Hal (B'grove) Prior, Rt Hon James
Mills, Iain (Meriden) Proctor, K. Harvey
Miscampbell, Norman Pym, Rt Hon Francis
Mitchell, David (Basingstoke) Raison, Timothy
Moate, Roger Rathbone, Tim
Molyneaux, James Rees, Peter (Dover and Deal)
Montgomery, Fergus Rees-Davies, W. R.
Moore, John Renton, Tim
Morgan, Geraint Rhodes James, Robert
Morris, M. (N'hampton S) Ridley, Hon Nicholas
Morrison, Hon C. (Devizes) Ridsdale, Sir Julian
Morrison, Hon P. (Chester) Rifkind, Malcolm
Mudd, David Rippon, Rt Hon Geoffrey
Murphy, Christopher Roberts, M. (Cardiff NW)
Myles, David Roberts, Wyn (Conway)
Neale, Gerrard Ross, Wm. (Londonderry)
Needham, Richard Rost, Peter
Nelson, Anthony Royle, Sir Anthony
Neubert, Michael Sainsbury, Hon Timothy
Newton, Tony St. John-Stevas, Rt Hon N.
Nott, Rt Hon John Scott, Nicholas
Onslow, Cranley Shaw, Giles (Pudsey)
Oppenheim, Rt Hon Mrs S. Shaw, Michael (Scarborough)
Page, Rt Hon Sir G. (Crosby) Shelton, William (Streatham)
Page, Richard (SW Herts) Shepherd, Colin (Hereford)
Parris, Matthew Shepherd, Richard
Patten, Christopher (Bath) Shersby, Michael
Patten, John (Oxford) Silvester, Fred
Pattie, Geoffrey Sims, Roger
Pawsey, James Skeet, T. H. H.
Percival, Sir Ian Smith, Dudley
Speed, Keith van Straubenzee, W. R.
Speller, Tony Vaughan, Dr Gerard
Spence, John Viggers, Peter
Spicer, Jim (West Dorset) Waddington, David
Spicer, Michael (S Worcs) Wakeham,John
Sproat, Iain Waldegrave, Hon William
Squire, Robin Walker, Rt Hon P.(W'cester)
Stainton, Keith Walker, B. (Perth)
Stanbrook, Ivor Walker-Smith, Rt Hon Sir D.
Stanley, John Waller, Gary
Stevens, Martin Walters, Dennis
Stewart, Ian (Hitchin) Warren, Kenneth
Stewart, A (E Renfrewshire) Watson, John
Stokes, John Wells, John (Maidstone)
Stradling Thomas, J. Wells, Bowen
Tapsell, Peter Wheeler, John
Taylor, Robert (Croydon NW) Whitney, Raymond
Taylor, Teddy (S'end E) Wickenden, Keith
Temple-Morris, Peter Wilkinson, John
Thatcher, Rt Hon Mrs M. Williams, D.(Montgomery)
Thomas, Rt Hon Peter Winterton, Nicholas
Thompson, Donald Wolfson, Mark
Thorne, Neil (Ilford South) Young, Sir George (Acton)
Thornton, Malcolm Younger, Rt Hon George
Townend, John (Bridlington)
Townsend, Cyril D, (B'heath) Tellers for the Noes:
Trippier, David Mr. Spencer Le Marchant and
Trotter, Neville Mr. Anthony Berry.

Question accordingly negatived.

Main Question put and agreed to.

Resolved, That this House takes note of the White Paper on the Government's Expenditure Plans 1981–82 to 1983–84 [Cmnd. 8175.]