Public Expenditure (Hansard, 27 October 1983)

§ 7. Mr. Sedgemore
asked the Chancellor of the Exchequer whether he intends to make any further reductions in the level of public expenditure.

§ 20. Mr. Ioan Evans
asked the Chancellor of the Exchequer if he has any plans for future changes in public expenditure.

§ Mr. Peter Rees
The 1983 public expenditure survey is still in progress. For 1984–85 and 1985–86 our objective is to hold to the totals of expenditure published in the last public expenditure White Paper. For 1986–87 we aim to keep total expenditure at broadly the same level in real terms.

§ Mr. Sedgemore
When next revising his public expenditure figures, will the Chief Secretary ask the Chancellor whether, for the moment, he will give up his determination to become the sarcophagus of 18th century British liberal economics, whose theories have been discarded by all rational people and rational Governments? In assessing the problems of 20th century depression, will he tell both the House and the 150 four-year-olds who have come here from Hackney today whether in his view, in theory or in practice, a relaxation of fiscal policy, including an increase in public expenditure, can lead to a permanent increase in the effective level of demand? If not—[Interruption.]

§ Mr. Speaker
Order. I think that is enough. It is unfair to other hon. Members to ask four or five questions at once.

§ Mr. Sedgemore
rose——

§ Mr. Speaker
Order. I think that is enough.

§ Mr. Rees
The hon. Gentleman's political and economic theories may still be stuck in the 18th century, but those of the Government whom I am proud to represent are not.

§ Mr. Skinner
Answer. Say yes or no.

§ Mr. Rees
I was asked about seven questions, and I am trying, in the interests of the House, to find a relevant question to answer. The hon. Gentleman must await the outcome of the present public expenditure round and the autumn statement.

§ Mr. Evans
As the European Assembly voted today not to pay the agreed rebate to Britain, what effect will that have on future public expenditure? As the cuts in regional aid have led to massive unemployment, is it not being penny wise and pound foolish to stop capital investment in productive industry?

§ Mr. Rees
I am unaware of any measures that have led to a cut in investment in industry. The hon. Gentleman may be aware of the generous system of capital allowances perpetuated by this Administration. It is a little early to say how the European matters which the hon. Gentleman mentioned will work out. The issue must go back to the Council of Ministers.

§ Mr. Kenneth Carlisle
Does my right hon. and learned Friend agree that the grim reality is that there is remorseless pressure for spending to increase in every area of Government? Does he accept that, by and large, the general public do not appreciate that and do not realise the terrible consequences for tax which it implies? Is it not time to open up the debate on how we finance the huge Departments of State in the long term?

§ Mr. Rees
I am grateful to my hon. Friend for drawing attention to the problems, and he is not the first of my hon. Friends to do so. This should be a matter of public concern, and it would be extremely helpful if there were an informed debate about the real options facing Britain, rather than the spurious options peddled by the Opposition.

§ Mr. Renton
Does my right hon. and learned Friend recall a report in The Times a few weeks ago that the Chancellor intended to open up the public expenditure debate and involve a rather wider public? That is an excellent idea. Was that report correct and, if so, how does my right hon. and learned Friend intend to implement it?

§ Mr. Rees
If my hon. Friend was at Blackpool, he will recall that at least three speeches from the platform dealt with this question. I am sure that future contributions from my right hon. and hon. Friends will be welcome.

§ Mr. Shore
The Chief Secretary referred to informed debate about the real options facing the country. Was not the failure of the Treasury and the Government to provide the nation with the real information and real choices ahead the most disgraceful part of their behaviour during the general election? We understand that we must await the full autumn forecast, but why has the Chief Secretary already decided to cut the rate support grant, NHS expenditure and repair grants to the already terribly damaged building industry? If what the Chancellor said about a sustained recovery of the economy is true, why have these cuts been pressed forward with such vigour?

§ Mr. Rees
I cannot identify the cuts to which the right hon. Gentleman refers. If he will contain his impatience, he may be enlightened during tonight's debate on what has happened in the NHS. He will perhaps then appreciate the massive resources that have been committed by the Conservative Government since 1979, which reflects great credit on this Government. That point appears to have escaped the right hon. Gentleman's attention.