HC Deb 17 December 1981 vol 15 cc442-3
12. Mr. Adley

asked the Chancellor of the Exchequer whether, for planning purposes, he draws a distinction between public expenditure on infrastructure projects and on public holdings in manufacturing industry.

Mr. Brittan

Yes, Sir.

Mr. Adley

Does my right hon. and learned Friend accept that if taxpayers stopped funding BL it would stop building cars but somebody else would fill the market share, whereas if they stopped funding British Rail the railways could not be run and nobody else would pick up the tab? Does he recall using the phrase "a uniquely useful tool" in reply to me on question No. 9? Does he agree that British Rail fits precisely that description? Does he further agree that, for political and social reasons, we need a modern and efficient railway and that failure to invest therein is abject folly?

Mr. Brittan

I seem to recall using the phrase "a uniquely useful tool", but, so far as I remember, I said that whatever we were then discussing was not such a tool.

To answer the serious point raised by my hon. Friend, of course I agree that the consequences of ceasing to finance public services are different from those of ceasing to finance manufacturing industry in public ownership. Nevertheless, it would be foolish to deny that the consequences of ceasing to finance BL would be very serious for whole areas of this country.

With regard to British Rail, of course I wish there to be the investment necessary to maintain an effective railway, but I want it to be financed by the increased productivity that the taxpayer may reasonably expect. That is the approach being made by the Government and I am absolutely sure that it is right.

Mr. Woolmer

An increase in manufacturing investment would clearly be most welcome and would be given an enormous boost by an increase in demand for our products, but will the Chief Secretary consider the disastrously low level of public house building in this country? In view of the hundreds of thousands of unemployed construction workers, the millions of unsold bricks and growing council house waiting lists, how can he justify holding down public expenditure on housing?

Mr. Brittan

One must consider housing as a whole, not just public housing. This year, private sector housing starts have increased by 40 per cent. compared with the second half of last year.

Mr. Marlow

Will my right hon. and learned Friend confirm that infrastructure expenditure allocated to the coal industry this year and next year will not be spent on miners' pay?

Mr. Brittan

I cannot give confirmation in quite that form. As my hon. Friend knows, the constraint operating on the National Coal Board is the external financing limit, which was recently announced for 1982–83.

Mr. Park

Does the Chief Secretary agree that a proper activity for him and his colleagues and Treasury officials, and one which we should expect them to undertake, is to keep a close eye on assets being sold, for instance by BL, to ensure that the best possible deal is made so that public money can come back and be re-invested elsewhere?

Mr. Brittan

I certainly agree that if public money is put into BL or any other concern, we, as custodians of that money, have a real and proper interest in what happens to it and whether it is used for re-invesment where there is a subsequent sale. We should certainly look carefully at what happens to the substantial proceeds of any such sale.