HC Deb 19 June 1986 vol 99 cc1191-2
14. Mr. Willie W. Hamilton

asked the Chancellor of the Exchequer if he has further plans to reduce public expenditure.

Mr. MacGregor

I refer the hon. Member to the reply I gave earlier to the hon. Member for Walsall, North (Mr. Winnick).

Mr. Hamilton

As the Minister has been at pains in the course of that answer to talk about the great successes of the Health Service financial provision, how does he explain the report in the Daily Telegraph today that the Secretary of State for Social Services is putting in for a £1.7 billion increase in the Health Service provision? Is that designed to build on success, or to cover up failure?

Mr. MacGregor

The hon. Member will know that it is a regular feature at this time of year for commentators to speculate and to throw out all sorts of guess figures into the air in the hope that one will eventually come down. I shall not comment on speculation in the press.

Mr. Leigh

What would be the effect on the unemployment trap if failure to curb public spending prevented my right hon. Friend from making significant tax cuts for the lower paid? Does this question not underline the need to achieve real value for money in the public service and not to pretend to the people that merely pouring increasing amounts of taxpayers' money into the bottomless pit of public spending will solve our problems?

Mr. MacGregor

My hon. Friend is right. He is also right to concentrate on value for money. One of the messages that we have to get over to many who comment in the media, and also to the public at large, is that we cannot achieve better services solely by throwing more money at the problems. Better value for money and concentration on greater efficiency can do just as much. That is why in the road programme, for example, we are getting 20 per cent. more roads for every pound spent than in 1979.

Mr. Madden

What does the Chief Secretary say to people like the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who earlier this week told us that his constituents would rather do without tax cuts if the price of tax cuts meant that less money would be spent on the National Health Service? Does the Chief Secretary think that the right hon. Gentleman is misreporting the views of his constituents, or does he think that those constituents are misguided?

Mr. MacGregor

I have already indicated that we have not reduced expenditure on the Health Service—quite the reverse. There has been a substantial increase in expenditure on the Health Service. Under the RAWP formula, introduced by a Labour Government, there is a provision to switch some resources from areas of high resource to areas that have been under-resourced under that formula over the years. That formula is now under review. It is one of the factors that is important. [Interruption.]

Mr. Speaker

Order. It is very difficult to hear questions against the background of chat.

Dr. McDonald

Does the Chief Secretary agree with the Leader of the House, the Home Secretary and the Minister for Information Technology that priority should be given to public spending rather than to tax cuts?

Mr. MacGregor

I should have thought that on the Government side of the House we were all agreed that reducing the burden of taxation is an important priority. Clearly none of us would ever contemplate moving to the ridiculous levels of higher public spending that the hon. Lady and her colleagues advocate.

Mr. Kenneth Carlisle

Does my right hon. Friend agree that because of political pressure from the public the reality is that it is impossible to reduce public expenditure and that we can pay for the many programmes that we wish for only by having genuine economic growth?

Mr. MacGregor

It is through genuine economic growth, which we have been achieving since 1981, that we can increase in real terms our public spending programmes in many areas under our existing plans and at the same time keep public expenditure level in real terms and reducing as a proportion of GDP.