Public Expenditure

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 24th March 1977.

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Photo of Mr Frank Allaun Mr Frank Allaun , Salford East 12:00 am, 24th March 1977

asked the Chancellor of the Exchequer if he will state the approximate cost in 1977–78 of restoring the cuts since February 1976 in housing, education, health and overseas aid, respectively; what estimate he makes of the effect of such restoration on the total number unemployed; and if he will consider giving priority to this in his Budget.

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

The programme tables in Part 2 of Cmnd. 6721 show changes from Cmnd. 6393. The aggregate saving was about £375 million. To restore this sum would mean increasing the basic rate of income tax by ¾p or increasing indirect taxes sufficiently to raise the RPI about ½per cent. The possible employment effects of any increases in individual programmes from the levels announced in Cmnd. 6721 would depend on how such increases were spent within the programmes concerned. My hon. Friend will have to await my Budget Statement for an answer to the last part of his Question.

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

Will the Chancellor give more attention to the letter from the National Executive Committee of the Labour Party on this matter—

Photo of Mr Frank Allaun Mr Frank Allaun , Salford East

—than to any views that may come from a certain Liberal gentleman? Secondly, while I welcome tax reliefs for the lower paid, if, as now suddenly and astonishingly appears to be the case, the Chancellor is in a position to give away large sums, is it not only fair that a good part of this should go to helping those who need homes, home helps and nursery schools, and who are being so seriously hit by the recent cuts?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I shall give immensely careful attention to any communication that I receive from the NEC of the Labour Party—quite as close attention as I would give to representations made to me by the hon. Member for Cornwall, North (Mr. Pardoe).

On the question of a possible improvement in the prospect for the public sector borrowing requirement, my hon. Friend will recognise that, if such an improvement proves to eventuate, it will be due to an improvement in the exchange rate and a fall in interest rates, which is consequential on the steps I took to cut public expenditure last year.

Photo of Sir Peter Emery Sir Peter Emery , Honiton

As the rate of personal income tax arises on this Question, will the Chancellor—if not today, in his Budget Statement next week—state categorically by what date the present Government will reduce the level of personal tax to that which existed in 1973–74?

Photo of Mr Denis Healey Mr Denis Healey , Leeds East

I shall bear in mind the point made by the hon. Gentleman, as I shall all the 2,379 other points that have been made to me for inclusion in my Budget Statement.