HC Deb 21 July 1975 vol 896 cc36-7W
Mr. Kenneth Clarke

asked the Chancellor of the Exchequer what approximate effects he expects the policies proposed in Command Paper No. 6151 will have on total public expenditure and receipts in 1975–76 and 1976–77, in current prices.

Mr. Joel Barnett

The White Paper measures will have a progressive restraining effect on public sector wage and salary costs becoming fully effective only after 12 months. The effect on procurement costs will take longer to come through. Receipts of taxes on income and indirect taxes particularly VAT, will be correspondingly affected, a little later, and there may be indirect effects on both expenditure and income. It is estimated that there will be no significant net effect, the change in expenditure being broadly off-set by a reduction in receipts.

Mr. Corrie

asked the Chancellor of the Exchequer to what extent he still regards as accurate the forecasts of the public sector deficit and borrowing requirements in 1975–76 set out in Table 6 of the Budget Statement for 1975–76, in view of the measures proposed in Command Paper No. 6151.

Mr. Dell

It is not customary to publish estimates of the public sector deficit and borrowing requirement between Budgets. But I estimate that the measures proposed in Command Paper No. 6151 will have no significant net effect on the public sector deficit and borrowing requirements in 1975–76.

Mr. Peter Mills

asked the Chancellor of the Exchequer to what extent he still regards as accurate the projections of total public expenditure for 1975–76 onwards in Table 3.1 of Command Paper No. 3879, in particular the projections of total expenditure in volume terms, the relative price effect and the desirable contingency reserve, in view of the measures proposed in Command Paper No. 6151.

Mr. Joel Barnett

As regards 1975–76, a number of measures have been announced since the publication of Command 5879 which will affect the level of expenditure shown in that White Paper, but a contingency reserve was included to deal with items of this kind. As regards the later years, my right hon. Friend the Chancellor of the Exchequer announced in his Budget substantial reductions in planned expenditure in 1976–77 and said that the programmes for the later years would be reviewed in the 1975 public expenditure review, which is now taking place. This review will also cover the appropriate size of the contingency reserve. The measures proposed in Command 6151 are not expected to have a significant impact on the relative price effect. The outcome of the Government's reappraisal of expenditure plans will be published in the annual White Paper later in the year.