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 Dick Douglas Mr Dick Douglas , Clackmannan and East Stirlingshire 12:00 am, 29th January 1974

That is not in dispute. I am arguing that these transfer payments would be necessary anyway to ensure that people had an adequate standard of living.

Looked at from the point of view of national income accounting, the transfer payments go into consumer expenditure. It is important to make that distinction. I take it that the hon. Member for South Angus appreciates the distinction. On 17th December the Chancellor of the Exchequer argued that It would be quite wrong for the public sector to continue unabated its demands for goods and services and its consumption of energy, leaving the private sector to bear the whole of the brunt of the energy shortage."—[OFFICIAL REPORT, 17th December 1973; Vol. 866, c. 963.] That indicates what was in the right hon. Gentleman's mind. One might conversely argue that it would be wrong that the private sector, in times of national crisis, should be almost completely exempted from the consequences of direct fiscal cuts while the public sector bore the whole brunt of them. But the Chancellor is willing to accept that in real terms—because the cuts in taxation are at the margin—the public sector should bear the whole brunt in terms, not of the macroeconomics of demand management, but of the people in my constituency and other constituencies in Scotland.

My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon)—I am sorry that he is not present to intervene if I misunderstood him—indicated that there was very little knowledge about what the cuts meant. There is a great deal of knowledge of what they meant to Scotland. We had the first salvo on 19th December 1973. I quote from the arrogant phraseology released on behalf of the Secretary of State for Scotland: With the fall in output resulting from the shortage of energy, it would be quite wrong for the public sector to continue, unabated, its demands for goods and services and its consumption of energy, leaving the private sector to bear the whole of the brunt of the energy shortage. That was what the Chancellor of the Exchequer had said. The document goes on to indicate what is expected from the cuts in the public sector in Scotland.

We had the second salvo on 21st December when cuts in the school building programme were announced. The primary schools which we need will not be built. Very few people will come to me saying, "We are very worried about increases in taxation and the possibility of other claims being made on us", but many people will argue for primary schools, because such schools are overcrowded, and they are not something which they can produce for themselves. This clearly indicates the difference between the parties.

The next salvo relates to housing. The Secretary of State for Scotland, in accordance with his housing finance policy, has decreed that local authority rents should rise. I shall not go into the merits or demerits of that matter——