Public Expenditure

Part of the debate – in the House of Commons at 12:00 am on 29th January 1974.

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Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton 12:00 am, 29th January 1974

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof, pays tribute to the work of the Expenditure Committee and its Sub-committees, but condemns the White Paper on Public Expenditure to 1977–78 (Command Paper No. 5519) in conjunction with the statement by the Chancellor of the Exchequer on 17th December 1973 for failing to meet the needs of the serious economic crisis facing the nation; and particularly deplores the concentration on cuts in public services whilst failing to reverse the taxation and industrial policies that have done so much to create the present emergency". I begin by congratulating the Chief Secretary to the Treasury on his new appointment. I am sure we shall await with interest to see whether he will make as many gaffes as his predecessor did.

That hon. Gentleman started well by telling us that the Chancellor of the Exchequer's economic strategy was going marvellously and was always planned. I doubt whether the hon. Gentleman can do much better than that by way of gaffe. He said, in effect, "If we do this and if we do that, everything will turn out wonderful." It reminds me of a saying we have in Lancashire—if my cat only had wings. That is virtually what the hon. Gentleman is saying—that everything would be marvellous again were it not for the fact that….

I want to pay my customary but none the less deserved tribute to the work of the members of the Expenditure Committee and of its chairman, the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) and of the chairman of the General Sub-Committee, my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon).

There was an interesting debate recently on the way in which the subcommittees are doing their job, and it would be wrong to repeat what was said then on a day when, I hope, we shall be debating what should be the Government's policy in the central part of economic strategy—expenditure. One cannot help feeling sorry that we do not have from the Select Committee a specific report which would help the House and the Government to make up their minds on the advantages or disadvantages of public as against private expenditure and, as the current in-phrase has it, the relativities or resource costs of one item of public expenditure against another, or the cost effectiveness of particular cuts.

As far as I can see, there is only one sub-committee which could do the job—the General Sub-Committee—unless we set up a sub-committee with a representative of each of the others. But one fears that that is not practicable in the present situation. Another course might be for the main Committee to consider doing the job itself.

The Chief Secretary mentioned presentation. It has become customary for us to discuss it in these debates. I hope the hon. Gentleman will not object if I say that I think that it is better left to debate in the main Committee, leaving those other hon. Members who are interested to read about it in the Committee's report. Indeed, if sufficient other Members were interested, a separate debate should be arranged. The fact that these debates have in the past dwelt to a considerable extent on technical jargon has been one of the reasons why other hon. Members have been driven away from the Chamber. The hon. Gentleman's predecessor put it very well last year, when he said: … there has been a tendency in the management and scrutiny of public expenditure to be regarded increasingly as an esoteric exercise understood and participated in by relatively few experts."—[OFFICIAL REPORT, 7th February 1973; Vol. 850, c. 463.] The last thing we want to do is to leave it to the experts. I hope that the experts will forgive me, therefore, if I do not get too involved in jargon and technical statistical arguments. There is one issue which might perhaps be called "semi-technical". It is under-spending the forecasts of public expenditure. This clearly is of some importance to us, especially when we debate at length the fine points of whether we can afford, for example, an extra £7 million for school milk and then rule it out on ground of economy, only to find that the forecasts of public expenditure, whose rigid limits are defended to the hilt by all Goverments, are underspent by hundreds of millions of pounds.

In this part of my speech at least I am not making a party point. We all know that the figures themselves are not extracted by Ministers, and certainly not by the Chief Secretary, but they, poor devils. have to make the best of them. For 1973–74 the specialist adviser to the General Sub-Committee in a memorandum has calculated that expenditure on goods and services will be some £1,400 million under-spent, £1,271 million of that due to estimating reasons. Although there may be some acceleration in the second half of the year, as we all accept, this makes no allowance for the fuel crisis.

Lest anyone thinks that there is a lot more to spare, I would point out that the under-spending, it appears, will be balanced by a very similar amount of debt interest and subsidies. The serious lesson to be learned is surely that politicians' policies must not be rigidly based on experts' estimates. If we can get it so wrong for the first year, we must surely have very big problems in calculating for five years. as we try to do in White Papers.

The Chief Secretary's predecessor last year, even before his more recent hard lessons on such matters as statistics, told us: In the Treasury we talk about ' the medium-term assessment '. What it is in fact, as I told the Expenditure Committee last year, is a statistical construction based on hypotheses."—[OFFICIAL REPORT, 7th February 1973; Vol. 850, c. 473.] What he meant was, "Guessing".

I am reminded of a story of a man working as a civil servant during the war in an outlying ministry. Every month he had to send figures to Whitehall. He wondered what happened to them. One month he decided to add a nought to the figures. Nothing happened. The following month he added two noughts. Indeed, he carried on adding noughts throughout the rest of the war and still nothing happened. I hope that no one is doing that to the figures at the moment, but one cannot help wondering.

The guessing, I imagine, will not prevent academics, financial journalists and other commentators from writing learned articles on which they will base firm conclusions. I envy them the degree of certainty they have in their conclusions. The rest of us, less dogmatic, I hope, in our assertions, will, I trust, recognise the wide margin of perfectly understandable error there is in this science and plan our policies with a sufficient amount of flexibility to take it into account.