HC Deb 30 April 1981 vol 3 cc894-6
5. Mr. William Hamilton

asked the Chancellor of the Exchequer what further plans he has for cutting public expenditure.

Mr. Brittan

Our plans for public expenditure, which were published in the recent White Paper, will be reviewed in the course of the forthcoming annual survey of expenditure.

Mr. Hamilton

Does the right hon. and learned Gentleman expect to make another slash before the Summer Recess or after it? In the light of article in The Times today, will he give an assurance that the Government will not further clobber the poor, the sick, the disabled and the old, who have been clobbered unmercifully in the past two years?

Mr. Brittan

I have no announcements to make about public expenditure cuts at the moment. The hon. Gentleman might, however, have observed from the public expenditure White Paper that spending on social security and health is planned to increase during the period 1980–81 to 1983–84. His strictures are, therefore, wholly unfounded.

Mr. Forman

Will my right hon. and learned Friend in his future plans for public expenditure concentrate on the control of public sector pay and look more favourably upon capital projects in the public sector which can have a reasonable rate of return?

Mr. Brittan

I accept that many people feel that the balance ought to be shifted in that direction. But I also very much accept the implication behind what my hon. Friend has said, namely that there can be room for desirable forms of expenditure, whether of the kind that he identifies or others, only if matters such as the cost of the pay bill are kept in check. It is enormously important that this should be done if our other objectives are to be achieved.

Mr. Shore

In view of the Chief Secretary's reply to my hon. Friend the Member for Fife, Central (Mr. Hamilton) some moments ago, are we to understand that in the forthcoming review of public expenditure he has firmly excluded any proposal for further cuts in the programmed increases for pensions, social security and other categories? Will he give that undertaking?

Mr. Brittan

The right hon. Gentleman was in Government long enough to know that nothing is excluded from a process that has not even begun.

Mr. Dorrell

When my right hon. and learned Friend reviews the Government's public expenditure programmes, will he take steps to draw a clearer distinction in the national accounts between capital and current expenditure? Does he agree that there is no necessary reason to insist that capital expenditure should always be funded out of current revenue and that, while there should be a broad balance between current revenue and current expenditure, the proper determinant of the level of capital expenditure may be the availability of borrowed cash at reasonable interest rates?

Mr. Brittan

I am not sure that I accept the latter formula in quite the way that my hon. Friend has put-it. As I said in the debate on the White Paper on public expenditure, there are clear indications in the published documents of the division between capital and current expenditure. We are considering the presentation of the facts in order to ensure that the House and the country have—as they are entitled to expect—a clear view of what has been done in this area as well as in the rest of the Government's accounts.