Public Expenditure

Part of the debate – in the House of Commons at 12:00 am on 22 July 1976.

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Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey 12:00, 22 July 1976

The Chancellor of the Exchequer has made a long and important statement which we shall need to study with care. I hope that he can confirm that we shall have an opportunity to debate it, and that he may be able to give us some details of the figures he has announced in a form comparable with the public expenditure White Paper, so that we may see exactly what the implications are for some years ahead.

We on this side of the House welcome the fact that the Chancellor and the Prime Minister have taken a significant step in the right direction and begun to grapple with the real problems that have been affecting our economy for the past few years. Even so, there are some matters about which we shall need to know more. For example, we shall need to study the proposed cuts in defence expenditure. We shall also need to study very closely those proposals for cuts that are expressed in terms of rephasing, deferring and postponing, in order to ensure that true reductions are being made in spending programmes in the years ahead.

Can the right hon. Gentleman tell us a little more about the proposed increase in employers' national insurance contributions? Does he accept that it amounts to an increase in indirect taxation and will be one of the significant factors contributing to the price increase of 1 per cent. that he suggests?

The Chancellor has told the House that he expects these measures to reduce the fall in unemployment—which I understand to mean that they will increase unemployment—in early 1978 by about 60,000. How far does he expect the increase in employers' contributions to represent an increase in unemployment?

We regard the Chancellor's announcement today, important as it is, as simply the first step along the long, hard and stony road that will have to be followed to restore the balance and health of our economy.