HC Deb 08 March 1984 vol 55 cc979-81
12. Mr. Budgen

asked the Chancellor of the Exchequer when he intends to publish his long-term proposals and options for public expenditure.

Mr. Lawson

A Green Paper on public expenditure and taxation in the 1990s will be published on Budget day.

Mr. Budgen

Will the Government set out their priorities for cutting public expenditure in the event of their assumptions for containing public expenditure and an optimistic assessment of growth not being achieved?

Mr. Lawson

A Green Paper is, of course, a discussion document, one of its main purposes being to elicit responses from others outside the Government. One of the responses to which I most look forward is that from my hon. Friend.

Mr. Loyden

Will the Chancellor now end his relentless and unsuccessful attempts to resolve the ever-deepening crisis within the economy and turn his mind to massive public expenditure to provide the jobs needed and to start the recovery of the economy?

Mr. Lawson

There is a great social problem of unemployment in many parts of the country, and no Conservative Member would wish for a moment to minimise it. I hope that Opposition Members will equally acknowledge that the economy is recovering and is in a sounder and healthier position than for many years.

Mr. Yeo

Does my right hon. Friend agree that, despite the strength of the economic recovery, on which I congratulate him and his colleagues, the level of public sector capital formation is still causing worry? Will he include in his paper next week some options showing how public capital investment can be increased?

Mr. Lawson

I understand my hon. Friend's view, which I know is widely shared. I am not sure that it is especially helpful to consider public expenditure on capital account as a whole. Each individual project must be justified on its merits. I am sure that my hon. Friend will look at table 1.13 in the public expenditure White Paper published last month, which showed that during the past four or five years, in aggregate, public sector capital formation years has been roughly stable in real terms.

Mr. Wainwright

As the official release of long-term options will give rise to immediate public discussion, and as the long-term survey does not contain market-sensitive information, will the Chancellor be courteous enough to give hon. Members the assistance of advance copies on the morning of Budget day?

Mr. Lawson

That is not possible, for reasons that will become clear to the hon. Gentleman when he sees the document.

Mr. Higgins

Is it still the Government's policy that the availability of finance will determine the level of expenditure, and not the other way about, and will the Green Paper include both sides of the economic equation?

Mr. Lawson

Yes, Sir.

Mr. Freeson

Will the Chancellor bear in mind that private sector industry depends largely on public expenditure, especially on capital account, and in particular that the construction industry depends for about 50 per cent. of its work load on public capital investment? Would it not be wise, if not urgent, to increase capital investment for the benefit of the construction industry, get the houses and other buildings that we require put up and bring back into employment some of the more than 4,000 unemployed construction workers?

Mr. Lawson

It is the policy of this Government to allow as many people as possible to own their own homes—in other words, we attach greater importance to the provision of housing in the private sector than to the provision of housing in the public sector. That is why we have given council tenants unparalleled opportunities to buy the homes in which they live, and I am glad to say that large numbers of them are doing that.

Mr. Dorrell

Has my right hon. Friend seen the reports that have started to emerge of skilled labour shortages in manufacturing, and of industries trying to recruit but being unable to find people with the right skills? In making his long-term plans for public expenditure, will my right hon. Friend make certain that there is adequate provision to ensure a proper supply of skilled people to the labour market?

Mr. Lawson

My hon. Friend is on a good point. My right hon. Friend the Secretary of State for Employment and his predecessors have done more for training than any previous Government. My hon. Friend will be interested to know that this was a matter on which we had a worthwhile discussion in the NEDC only yesterday.

Mr. Campbell-Savours

If the Government's policy is real economic growth and no real growth in the public sector, what happens if the real growth assumptions in the economy are not met? Does that mean that there will be a fall in public expenditure? Is it true that the Prime Minister has issued instructions to each of the Departments that they should not publish the real effects on individual services provided by the state if those public expenditure cuts were to be introduced, to avoid embarrassment to the Government and yet another banana skin?

Mr. Lawson

There are no such instructions and the hon. Gentleman is piling hypothesis upon hypothesis.

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