HC Deb 28 November 1991 vol 199 cc1057-9
7. Mr. Cohen

To ask the Chancellor of the Exchequer if he will make a further statement about public spending levels.

Mr. Mellor

The Government's plans for public spending were announced in the Chancellor's autumn statement on 6 November. Further details were set out in the written statement published on 13 November.

Mr. Cohen

Most people who see the run-down state of schools and public transport do not think that the picture of public spending is as rosy as that set out by the Chancellor. Does the Minister remember that before the last general election the Government promised an increase in public spending of £11.2 billion in the following three years? In fact, it turned out to be a cut of £12.7 billion. In those circumstances, is not the Chancellor's promise of an extra £10 billion a similar Tory election hoax? Far from protecting public services, is not the Conservative party the party of public squalor?

Mr. Mellor

The hon. Gentleman would do me a great favour if he could kindly confirm that his party, if in power, would spend an extra £13 billion above what we are spending. We have been trying to extract the figures from the Opposition. If the hon. Gentleman has agreed with members of his Front Bench that that is the line to take, I should be glad of confirmation.

Mr. John Marshall

Does my right hon. and learned Friend agree that spending an extra £35 billion could be financed only by massive increases in taxation and higher interest rates, which would lead to a massive increase in the level of unemployment?

Mr. Mellor

This is a point to which we return time and again. No Opposition have ever mutilated more forests in the interests of producing an endless stream of written policy documents containing come-ons and pledges of all sorts to every sectional interest, but when we add up those pledges and cost them, the Labour party becomes very coy. We want to know—[Interruption.] The right hon. and learned Member for Monklands, East (Mr. Smith) can leap up and tell me—the House would be delighted to hear from him—how he will cover the difference between the £10 billion of extra taxation to which his party has already committed itself and the £35 billion of extra spending to which it has also committed itself?

Mrs. Beckett

rose——

Hon. Members

Answer!

Mrs. Beckett

When I am on the Government side of the House it will be my turn to answer questions. Now it is my turn to ask them.

Speaking of how to meet levels of public spending, does the Chief Secretary recall the sharp increase in borrowing forecast in his public spending programmes? Will he confirm that it would be grossly irresponsible for any Government to cut the standard rate of income tax when public borrowing is about to shoot up in that way and that consequently, if the Chancellor of the Exchequer proposes such a cut in his next Budget, he will have to make it up by increasing other taxes—perhaps VAT?

Mr. Mellor

The record shows that during the 1980s we were able both to increase public expenditure in real terms by about 20 per cent. and to cut tax rates—[HON. MEMBERS: "No!"] Oh yes—and for the decade following 1981–82, we reduced the tax burden.

Mr. Campbell-Savours

That is wrong.

Mr. Mellor

It is not wrong and I understand that next week we shall have the opportunity to debate the correctness of what I have said.

Mr. Nicholls

Given the new-found concern of the hon. Member for Derby, South (Mrs. Beckett) about public borrowing, will my right hon. and learned Friend remind her that the previous Labour Chancellor of the Exchequer managed to borrow not only more money than any previous Chancellor, but more money than all previous Chancellors added together? What would that do for the living conditions of the poor?

Mr. Mellor

It is an interesting fact that the fastest-growing public expenditure programme under the Labour Government was not the health service, education or social services, but debt interest.