HC Deb 21 February 1985 vol 73 cc1186-7
7. Mr. Duffy

asked the Chancellor of the Exchequer if he has made any revisions to the estimates for the overshoot of public spending above targets contained in the recent public expenditure White Paper.

Mr. Peter Rees

An updated estimate of the public expenditure planning total outturn for 1984–85 will be published in the "Financial Statement and Budget Report".

Mr. Duffy

At least the right hon. and learned Gentleman has not made his perennial boast about holding spending in real terms. Presumably he now knows that hardly anyone believes him. Moreover, he continues to threaten us with cuts in spending programmes which might have boosted wealth to fund a social security bill which is the direct result of the Government's failure to generate jobs. Contrary to what the Financial Secretary has just said, does the right hon. and learned Gentleman agree that we want, not clamps on labour costs and price tags on public assets, but a sharp increase in spending power, which will increase wealth and jobs?

Mr. Rees

I remind the hon. Gentleman that the hon. Member for Tynebridge (Mr. Cowans) suggested that increased spending would suck in imports. Sustainable jobs will be created by the policy being pursued by the Government, not by a meretricious increase in spending on uncosted capital projects.

Mr. Stern

In the light of recent debates on water charges and local authority housing expenditure, does my right hon. and learned Friend agree that those who call most stridently for increased public spending are often those who are most reluctant to find means to pay for it?

Mr. Rees

My hon. Friend is absolutely right. That was evident in some of our debates—for example, on the increase in water charges, which will open the way to increased capital investment by the water authorities of nearly £1 billion next year.

Mr. Robert Sheldon

Will the Chief Secretary to the Treasury explain to us how he expects the external financing of the nationalised industries to be reduced by £3 billion over the next three years? When the Government last expressed optimism in 1980 they expected it to be reduced by £2 billion, but it never was. Why is the Chief Secretary more optimistic now than he was then?

Mr. Rees

It seems to have escaped the attention of the right hon. Gentleman that we have moved rather sharply out of the recession. It will also have escaped his attention that the nationalised industries are getting a rather firmer control over costs than they had before 1979.

Mr. Hickmet

May I ask my right hon. and learned Friend what he believes are the prospects for public expenditure overshoots on local authority expenditure and what effect he believes the present levels of local authority spending have upon job prospects and the economy as a whole?

Mr. Peter Rees

We believe that firm control of public expenditure is an important element in the Government's strategy and that that is the way to create sustainable long-term jobs. On my hon. Friend's precise question about local authority current spending, the Government have improved the control mechanisms. I have no doubt that my hon. Friend is a firm supporter of rate capping. Rate capping will operate on the 18 authorities which account for about 70 per cent. of the local authority overspend.