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 George Proudfoot Mr George Proudfoot , Brighouse and Spenborough 12:00 am, 29th January 1974

I am delighted to follow the refreshing speech of the right hon. Member for Birkenhead (Mr. Dell). It was the first straight political speech in the debate and I compliment him for that reason.

Yesterday the Expenditure Sub-Committee, of which I happen to be a member, took evidence. The evidence started with one of the Treasury knights saying that the White Paper was only of academic interest. I have spoken on the last three occasions when Public Expenditure White Papers have been introduced. Last year I felt that a one-day debate was not sufficient. This year, and perhaps because of the academic quality of the debate, I feel that one day is perhaps too much.

It must be admitted that the oil crisis has changed the outlook of the Western world. I can imagine that Treasuries in Europe and elsewhere are looking at their figures and wondering what will happen to the kind of arithmetic that is in our White Paper. It is not only this country that is in a mess. Every other country has the same mess on its hands.

On Monday, when I was in my constituency, I heard something on radio which made me think about the debate. I heard a quotation from an old philosopher. It was said that the world was made up of pessimists who looked only at the dark side of the clouds and moped; it then said that there were people who looked at both sides of the clouds and that they were the philosophers who shrugged their shoulders. Lastly, there were people who looked only at the bright side of the clouds and that they walked on the clouds all the time. The House often divides itself into the pessimists, who are represented by the Opposition, and the optimists, who are represented by the Government. I suppose that civil servants are the shoulder-shruggers who must get on with the whole thing.

The White Paper is the fifth of a line of similar White Papers. At least it has given the economic journalists something to write about. And they certainly write about it. It has the kind of pep of the theological argument of how many angels one can get on the head of a pin. It does not involve public opinion. It is very much a specialist argument. I heard the Chairman of the Sub-Committee, the hon. Member for Ashton-under-Lyne (Mr. Sheldon) mention accuracy. He said that we were £1,000 million out here and £500 million out there. That is right.

Those are the cash figures which are in the White Paper. However when we start to consider how far out the estimates are in percentage terms the matter takes on a slightly different complexion. When we consider how accurate the figures can be, the thousands of calculations which are made and the many spending Departments throughout the country which provide their figures for the White Paper, it is incredible that the present degree of accuracy can be attained.

For the first year, 1970–71, the figures were out by 4 per cent. For the second year they were out by 2·4 per cent. and for the third year by 2·9 per cent. For the three years together there was a discrepancy of 2·3 per cent. on £85,410 million. When the matter is put in that way, the figures do not sound dreadfully inaccurate.

Yesterday, when the Sub-Committee was taking evidence, it considered shortfall and whether the cuts were real. That was perhaps academic because it is obvious that both cuts and new expenditure can be real. The White Papers identify a Government's intention in a broad way. We have only to look through the White Papers for the last five years to see that the intentions of the last Labour Government were different from those of the present Government.

For those people who are, as it were, inside the figures—for example, the people who are responsible for getting them ready—the position looks very different from the position as seen by those who view them from the outside. The accuracy of the figures will always be debatable. I suppose that we must continue to have the White Papers, but in 25 years' time they may not be as important as we think they are now. They are indications and they may express hopes, but events outside any national Government's control can thrust such matters in any direction, as we have witnessed in the past few weeks.

Housing has been mentioned in the context of the White Paper. It is about time that we considered housing seriously. In the House we shout at each other all the time about a housing shortage. I am not convinced that there is such a shortage. We have a greater number of houses for our population than any other country in Europe. By that standard we are quite well housed. We should now consider our housing stock. It must be realised that we have many houses of the wrong size. The real demand is for smaller, single-bedroomed accommodation for retirees. Many councils have missed the boat in that respect.

In my constituency there are people who have their name on three or four local housing authority lists. It seems that those lists are like the motor car lists shortly after the war which were suddenly obliterated as motor cars became available. There is not a dire housing shortage in my constituency. In three and a half years only two constituents have come to see me about housing. I ask the Government to urge the new local authorities to investigate their housing lists and to revise them. In some areas we run the danger of having too many houses. It can be said that the stock of houses in the Yorkshire and Humberside Region is sufficient. About 100,000 houses in that stock are out of date. Some will have to be knocked down and some will be improved. The real shortage is in single-bedroom accommodation. As elderly people move into new, up-dated single-bedroom accommodation, which requires less looking after and less heating, younger people can move into the council houses which are too large for old people living on their own and which they have vacated.

The problem of big families has been mentioned. The answer has been found by many local authorities. If a local authority has a pair of vacant semidetached houses and it has a big family on the waiting list, it can open up the dividing wall and thereby provide accommodation for large families.

I am pleased that the Government intend to help housing associations. They have a great part to play in housing, and particularly for specialist groups such as the elderly.

Every time I look at the expenditure cuts I decide that one lot of cuts is sacrosanct. This year I would make expenditure on new roads sacrosanct. Greater productivity in every part of the country is derived from new roads. Everybody, except perhaps the environmentalists, wants motorways. That is because it is known that they increase economic efficiency.

Yesterday, when the Sub-Committee was taking evidence, a Treasury witness said that many of the shortages which were noted by the newspapers were purely anecdotal. I like that expression. There are many anecdotes about supposed shortages. All hon. Members can refer to one or two. I came across one a few weeks ago in the retail business. I was told that there was to be a dramatic shortage of paper bags. A person in charge of buying paper bags boastfully said "I have rung up all our suppliers and tripled the order for paper bags." That is how shortages are created. The difference between shortage and surplus is incredibly narrow in any economy and in any market. That applies not only to nations but throughout the world. The shortages which the world has seen this year will, I am sure, evaporate rapidly.

My hon. Friend the Member for Horn-church (Mr. Loveridge) said that if we made oil deals we would upset people in Europe. He seemed to be posing a conundrum, because a few paragraphs later he wanted to have import controls. I cannot imagine anything which would upset the world more than import controls. That would create, perhaps a world slump such as the slump which we had in the 1930s. To me that thought is horrific and abhorrent. I do not want to see mass unemployment.

It seems that the gloom merchants have got at the expenditure cuts. Future expenditure is to be cut, for example, on hospitals and roads. If we stop to take stock, it will be seen that we have more hospitals and schools than ever before. These cuts are not taking anything away from us except our expectations. Some people forget that in the political argument. We must take a rain check on them.

The White Paper talks of the management of the economy. I would love to be able to manage the economy and to operate a fine tuning control of it. It is the ambition of every politician, because then we would have perfection. I do not think that we will see it, either in my lifetime or that of my children. I accept all the electronic miracles that will come along, such as computers that can churn out statistics at an incredible rate, but I still cannot convince myself that we can tinker with the economy and get it exactly right.

The length of time between the tinkering and what happens is longer than any of us believe. In serving on the Expenditure Sub-Committee I get the awful feeling that trying to manage the economy is like being on the bridge of a giant tanker and attempting to bring it up the Thames at full speed. I can think of nothing more horrific. This has haunted me as I have heard witnesses dealing with these matters. I do not believe we will ever get much more efficient at it.

Many hon. Members have spoken about what they think should happen in the near future. I know that the Government are taking stock, as is every Western Government, as a result of the energy crisis. So far there have been no panic measures, and there should not be any. It would be bad business to do anything panicky and to try to act before the dust had settled. We ought not to hurl party political points at each other about getting the oil. I am sure that the motorists or the industrialists do not care where it comes from and whether we have to go to Switzerland to see the Shah of Iran as long as we get the oil.

I plead with my right hon. Friend the Chancellor not to increase taxation in the next Budget. There has been enough deflation. If we are not careful there will be far more people on the dole than anyone wants to see. We do not want mass unemployment. I would like to see the Chancellor cut income tax. If he still needs to raise the same amount, I would prefer to see him taking it from direct taxation and putting it on indirect taxation. I want people to be able to walk away from work with money in their hand and a free choice over a range of goods.

In that respect value added tax is excellent because it does not differentiate. It is a flat rate over the lot. All the talk of doom when VAT was introduced has vanished because the public have accepted that it is a fair tax which does not deflect their choice.