Public Expenditure

Part of the debate – in the House of Commons at 12:00 am on 17 March 1977.

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Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey 12:00, 17 March 1977

I invite the hon. Lady to look at Part I of the White Paper, and at paragraph 34 in particular. It states that The provision for some services in some areas will have to be reduced; and there will be a fall in staff numbers, estimated in England and Wales at 20–30,000. A sharper reduction would have been required but for a switch of about £130 million from previously planned capital to current expenditure That means that local government has decided to spend on the maintenance of its own current programmes £130 million and to slash other programmes to the same extent. That is one of a number of illustrations of the way in which the Government are allowing bureaucracy to continue undisturbed at the expense of those in the building industry.

The situation is more dramatically set out in Table 7, which spells it out with crystal clarity. The table deals with current expenditure on wages and salaries and states that wages and salaries in the public sector in 1975–76 were £15,566 million and that in the year still to come—1977–78—they will be more, and will total £15,910 million.

If one contrasts that with what has happened to capital spending programmes, taking the aggregate figure, in 1975–76 it was £10,786 million and in the coming year it will be £7,593 million. While the salaries of the people who are directly employed in the public sector have risen—and will rise into the year ahead—capital spending programmes have been cut by £¾ billion. The Government have allowed the public sector to look after its own at the cost of grave hardship to the rest of the working population.

One cannot endorse or accept a policy that imposes such a discriminatory and destructive burden on the construction industry and that leaves the great rolling programmes of central Government to go ahead.

Had we been allowed to table an amendment today it would have been directed to that point. It would have deplored the disproportionate burden placed on capital expenditure cuts, and on the construction industry in particular.

The amendment would have deserved the support of both sides of the House, because this is a misconceived, misshapen programme for cutting public expenditure. If that amendment had not commanded the support of the House, the general scale of reductions in public expenditure—