Vietnam

Part of Oral Answers to Questions — Overseas Development – in the House of Commons at 12:00 am on 19 March 1979.

Alert me about debates like this

Photo of Mr Robert Bean Mr Robert Bean , Rochester and Chatham 12:00, 19 March 1979

I followed the contribution of the hon. Member for Worthing (Mr. Higgins) with a great deal of interest. I was nodding because I was anticipating my cue to come in on my particular grouse—the effects of public expenditure cuts over the years on the construction industry.

For the first time the White Paper contains a reference to the construction industry. The House should appreciate that the construction industry relies heavily on public expenditure. A total of 90 per cent. of the civil engineering work load and 50 per cent. of the work load of building generally comes from public expenditure. Over the years, various stop-go policies of respective Governments have had a remarkable effect on the industry. I have looked through the White Paper and I have listened to Opposition Members' speeches. I do not think that the industry's future is bright. Lip service is paid to it, but the real intention is to cut back.

Public expenditure over the next four years will increase by about 10 per cent. but the construction industry's share will be only 1·3 per cent. In page 13, paragraph 53 states that The Government are concerned to avoid unnecessary fluctuations in the public sector's demand on the construction industry. But decisions on the level of construction and other capital spending must depend primarily on how the money available for particular programmes can be used in the most cost-effective way. That means, in other words, fiddling the books for political expediency.

Savings are being made on the road programme. There is a case for arguing that there should be cuts in road expenditure, on the grounds of environment and that there is a finite limit to the world's fossil fuels, but that is not the case put forward in the White Paper. If it were, surely the alternative money should be expended on other forms of transport—the railways or the revamping of inland waterways. Instead, the money saved from cuts in the road programme is being spent on subsidising the Port of London Authority. That may be laudable, but it is not in the interests of the economy or of the construction industry.

Considerable slippage has occurred in the amount of money being spent by local authorities on housing—£450 million. All hon. Members know that the slippage was deliberate. It was created by Tory councils which refused to carry out their obligations for public building in the housing sector. The Minister for Housing and Construction is aware of the slippage but can do nothing about it—it is a fact of life and a political decision. However, the Minister has said that he can increase public housing by encouraging the housing associations to step in. In the White Paper the contribution to the housing associations from the central fund has been reduced by £50 million this year. Again, only lip service is paid.

I followed with interest the contribution of my hon. Friend the Member for Bristol, North-West (Mr. Thomas). He said that there was a fundamental difference between the Front Benches and that it will be continued after the general election. I am inclined to agree with him. For the first time since the war, the Tory spokesmen are pushing through policies of the extreme Right. They call for cuts in personal taxation and public expenditure and say that this will lead to an increase in demand. That view has been echoed by the Bank of England Quarterly Bulletin, issued last week. The Bulletin also pointed out, however, that it could lead to an increase in imports. That is the danger. How can we ensure that cuts in public expenditure and personal taxation will find their way through into demand?

We all remember what happened in 1972 and 1974 when there was a deliberate stimulation of the economy. That did not result in an increase of our manufacturing base, and office blocks and new town centres sprang up. That was not a growth in the real economy. If efforts are to be made to increase our manufacturing base and our productivity, the Government should help by giving 100 per cent. tax incentives in the same way as incentives are given to manufacturers to write off the cost of installation of new machinery and tools. One has to look beyond the industrial base and take in the infrastructure—the railways, the docks, the roads and the whole network that is essential for the growth of our economy.

We are fortunate to have inherited the finest public health and water supply systems in the world. They were built by our Victorian forefathers to the best designs and the highest standards of workmanship. They still function after 100 years, but the toll of heavy traffic and the demands made on them are leading to the breakdown of the systems.

Our railways, docks and public services are badly in need of renewal and replacement. The White Paper makes no reference to that. Having listened to the speeches of Opposition Members, I cannot see how cuts in taxation and public expenditure will provide the replacement of these essential services.

I was particularly disturbed to hear the Chief Secretary refer to the workings of the cash limits. The emphasis was that if wage demands push expenditure over the cash limits there are price rises of over 8½ per cent. that would result in cuts in public expenditure. That may be one way of maintaining discipline over public sector wage claims, but it is an unfair and unjust method. Its effect will be felt on capital rather than on revenue. Every time, it is capital which is cut.

I believe that we need an increase in public expenditure to cope with the problems of the immediate future and those towards the end of the century. We are all aware that by the end of the 1990s we shall be faced by a different world. Our mode of travel, of generating energy and of working will be different. There is nothing in the White Paper to show that the Government are aware of those changes.

Investment in the future is essential. The White Paper and what the Government have said are purely for the time being and for political expediency. I am concerned about that because time is not on our side. If we are to have a future worth looking forward to, we should be investing now.