Public Expenditure (Hansard, 31 January 1991)

§ 2. Mr. O'Hara
To ask the Chancellor of the Exchequer what representations he has received from the Confederation of British Industry about the public spending planning total for 1991–92.

§ 4. Mr. Loyden
To ask the Chancellor of the Exchequer what representations he has received from the Confederation of British Industry about the public spending planning totals for 1991–92.

§ The Chief Secretary to the Treasury (Mr. David Mellor)
None, Sir.

§ Mr. O'Hara
Is the Chief Secretary aware that the Confederation of British Industry has been joined in its call for better training to eliminate the rigidities in our work force by the Employment Institute, the TUC and even the Organisation for Economic Co-operation and Development? Why are the Government ignoring the experts and planning real cuts in the Department of Employment budget in 1993–94?

§ Mr. Mellor
The recent CBI survey showed that three quarters of those asked were intending to spend as much on training next year as this year and that 29 per cent. were proposing to increase the money spent on training. The guarantees that the Government have given to various groups on training remain exactly as they were. In setting up training and enterprise councils and investing large sums of money in them, we have broadened the range of training and ensured that it reflects all the new insights into how to make it an effective way to get people into good, productive work.

§ Mr. Loyden
Is not it a fact that, in the traditions of the former Prime Minister, the present Government listen to no one? The CBI—the friends of the Government—has pointed out that rising unemployment and lack of quality training should be tackled at this stage. As my hon. Friend the Member for Knowsley, South (Mr. O'Hara) said, despite those warnings, the Department of Employment is cutting its budget by £1 billion in 1993–94. Is that how the Government treat the question of quality training and unemployment?

§ Mr. Mellor
The Government have an unprecedented record of success in training. A wide range of training opportunities has been especially successful with young people and with the long-term unemployed, as the figures show only too clearly. I understand that my right hon. and learned Friend the Secretary of State for Employment may have an early opportunity to lay before the House his training plans and when he does so it will be seen that the Government have one of the widest-ranging training plans anywhere in the world.

§ Mr. Tim Smith
As pressures mount on total public spending as a result of increased social security spending at home and the rising costs of the war in the Gulf, will my right hon. and learned Friend reaffirm the Government's 1091 commitment to firm control of both public spending and public borrowing as part of their counter-inflationary policy?

§ Mr. Mellor
The outturn of public expenditure this year is likely to be only 1 per cent. ahead of plans, as was forecast in the autumn statement and, as is known, inflation was not accommodated in the public expenditure settlement in the autumn. So there is absolutely no doubt that, notwithstanding the obvious burdens caused by changes in the economic cycle and the cost of the Gulf, public expenditure is under firm control today and will continue to be so.

§ Mr. Charles Wardle
If my right hon. and learned Friend were to signal higher public spending, would not the discipline of his fiscal policy be questioned and might not sterling suffer? Would not the CBI do better to advocate radical changes to the habit of granting automatic annual pay increases, if it wishes to encourage profitability and more industrial investment?

§ Mr. Mellor
I agree with the thrust of my hon. Friend's question, but in fairness to the CBI it is worth reporting that, in its memorandum on the economic priorities for 1991, it made it clear that tight control of public expenditure is vital. So it has no disagreement with us about that.

§ Mrs. Beckett
Will the Chief Secretary comment on recent reports of an average cut of some 12.5 per cent. in cash terms in the planning total for programmes for training the unemployed this year, just when the numbers are rising? Is not it at best short-sighted and at worst grossly neglectful of the national interest to cut training —and support for industry—at a time of recession?

§ Mr. Mellor
The hon. Lady is simply asking me to reiterate points that I made earlier—which, of course, I am only too happy to do, unless the hon. Lady is overruled by the shadow Chancellor, who has already grasped the facts.
The CBI survey shows that there is considerable enthusiasm for enhanced training in British industry, which it is itself funding. As I said, the range of training that we provide is as sophisticated and wide ranging as can be found anywhere in the world, and the new TECs initiative has been widely welcomed everywhere except on the Opposition Front Bench.