Public Expenditure

Part of the debate – in the House of Commons at 6:42 pm on 7 May 1980.

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Photo of Mr Eric Cockeram Mr Eric Cockeram , Ludlow 6:42, 7 May 1980

I seek to join in the debate because I have serious doubts about the level of Government expenditure envisaged in the White Paper. We are going through a period of world recession from which industry in this country, a trading nation, cannot be insulated. Yet, this year alone, the Government are planning to spend some £8 billion more than they are raising in taxation, further adding to the national debt. It is to the shame of this Government that if they continue on this path, they will have the unfortunate distinction of presiding over the nation's affairs when the national debt passes £100 billion. That is a formidable sum. I believe that the Government Front Bench needs to be reminded that only 11 years ago the national debt under a Socialist Government was reduced. That could also be done under a Conservative Government.

In consequence of this heavy borrowing requirement by the Government, small businesses have to labour under a very expensive borrowing rate of 17 per cent. Unless the Government tackle the level of their expenditure, they cannot expect industry to survive with a burden that has gone on longer, I believe, than the Government expected when the rate was announced.

My right hon. Friend the Member for Taunton (Mr. du Cann), in a lucid and helpful speech, drew attention to the number of civil servants. He pointed out that there are 48 per cent. more civil servants per million population in this country than in Germany and 68 per cent. more than in France. I do not believe that we are getting value for this level of expenditure.

We have 40 permanent secretaries, 150 deputy secretaries, 575 under-secret-aries, 1,150 assistant secretaries, 5,200 principal secretaries, 8,000 senior executive officers, 22,000 higher executive officers, and over 50,000 executive officers. Those are the officers. I have not yet come to the troops. The cost is enormous. In addition, there are the Civil Service index-linked pensions, for which civil servants make a notional contribution of only 2·6 per cent of salary. Anyone in the private sector would willingly make a notional contribution of 2·6 per cent. of his income in exchange for an index-linked pension when he retires.

The cost of financing these index-linked pensions in 1978–79, the last year of the previous Labour Government, was £390 million. At the end of this Parliament, presumably in 1983–84, the cost will be £560 million in constant terms—a 40 per cent. increase. The cost of financing index-linked pensions in the Civil Service represents one of the highest increases in Government expenditure in the whole White Paper. A 40 per cent. increase in real terms means, inevitably, more than a 100 per cent. increase in sterling terms.

What is to be done about this situation? The Government are nibbling at the problem. They are not cutting the Civil Service with a knife. They are waiting for Annie to get pregnant or Betty to leave when she gets married and failing to replace them. In consequence, after a year of Conservative Government, the Civil Service has been cut by under 5 per cent. It is easy to cut the Civil Service by the first 5 per cent. It becomes more difficult not to make replacements as the second 5 per cent. of people leave and is virtually impossible thereafter.

The only way to cut the Civil Service is to cut the functions performed by that administration. The public do not believe that for the taxes they pay they are getting value from the Civil Service and a level of administration that is greater than that of any of our partners in the Western world. We must cut functions. That involves paying compensation to those who have to leave.

Generous compensation has been paid to dockers to leave an industry that was overmanned. The dock labour force is about one-third of its level a decade ago. A similar approach is being adopted in the steel industry. The number of miners is infinitely smaller than it was 20 years ago. British Rail has also offloaded labour. Why cannot this be done in the Civil Service? It can be done, if the will exists.

Such action has been taken by the Government to a small extent. My right hon. and learned Friend the Chancellor eliminated exchange control. A group of civil servants ceased to have jobs. That was not a matter of waiting for someone to leave and failing to appoint replacements. It was a positive decision that a function performed by Government was no longer necessary. That is an example of what has to be done to a greater degree.

Hon. Members can all make sugges tions about where cuts could be made. I suggest that our training boards are not fulfilling a need. At a time when there are 1½ million unemployed and a training board exists in the construction industry, it is nonsensical that plasterers, plumbers, carpenters and bricklayers should be unobtainable. It should be possible to train people to fulfil those functions. I do not believe that people are served any better in shops, or that cars are filled with petrol more efficiently than 20 years ago, because there is now a distributive industry training board. This sort of quango and bureaucracy should be stopped.

In my constituency in Shropshire, and in the two constituencies immediately to the west and to the east, there are three different quangos offering money to tempt industry into that rural area. A number of hon. Members have spoken of the North-South divide. In some areas of the North of England there is a desperate need for labour, while Government money is employed through three different quangos in my constituency and its immediate neighbours.

If the Government really want to cut the number of civil servants and produce in Britain the ratio of bureaucrats to people who actually work and earn their living by contributing to the national wealth that exists on the Continent and elsewhere, they must cut functions instead of relying merely on a policy of failing to replace those who leave.