Public Expenditure

Part of the debate – in the House of Commons at 7:33 pm on 7th May 1980.

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Photo of Mr Anthony Beaumont-Dark Mr Anthony Beaumont-Dark , Birmingham, Selly Oak 7:33 pm, 7th May 1980

I should like to make a few comments, not as a member of the Treasury and Civil Service Select Committee, but as a Member of the House, about what Governments can and cannot do. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) said, unemployment is unacceptable. The implication is that the Government can sit round a Cabinet table, or we can sit here in this honourable House, and decide that 300,000 or 400,000 jobs can be created. Clearly, they cannot.

As I am so new to this House, but not new to what goes on outside, perhaps I might make a few realistic comments about the business man. As a rule, looking at all Government interference, whether Conservative or Socialist Governments, all the help that Governments have given whether by IDCs or grants to encourage industry to go up North, to go to Scotland, to leave Birmingham and go to Wales, has usually ended up as wasted money. Government interference usually leads to chaos. Industry needs Governments not to keep changing their policies, but to do well what they should and can do.

The Government can do two things. They can be consistent about not printing money that has not been earned, because that is what causes inflation, and they can help industry by having a sensible policy on pay and the size of the Civil Service. My right hon. Friend the Member for Taunton (Mr. du Cann) and my hon. Friend the Member for Ludlow (Mr. Cockeram) spelt out the figures. We employ about 2 million more civil servants than France, and Germany, which is a third larger than the United Kingdom, employs 1½ million fewer than we do. It is not that we spend too much on public service; we spend too much on administering that service and the distortions that it causes in private industry.

What do we end up doing when we talk about a wages policy? Many so-called good Conservatives say " We need a wages policy of 5 per cent. or a nil increase ". We are now suffering because we had a wages freeze. I am sure that Professor Clegg is an honourable and sensible man, but what he has been asked to do and is doing is insane. There is no such thing as comparability for the job. Every time we freeze wages, some silly person says " Let Professor Clegg or someone like him judge one job against another". A job can be judged only by the market.

Whether it be this or the previous Labour Government's plans, I can tell the unions how they can get employment to go to the North of England. It is not hard. The thing to do is to have a sensible basis for wages paid in the South and in the North. There is not a comparability of expenditure. A house in the North of England which costs £10,000 will probably cost £30,000 in the South. But no one then says " What about comparability? " because comparability does not seem to work from a union point of view at that time.

If we are unable to be genuine and hope that employment will go where it is most wanted, it has to be because it is profitable for an industry to move. The reasons for distortions in employment lie not the problems of transportation, but in the distortions that successive Governments, with good intentions, build in.

I believe that the Government are right to be vague in the White Paper about how they see the next three or four years. One of the great problems of past White Papers has been that all the wonderful plans that have been laid out—the visions of what will happen always being good, particularly when elections are near—have been based on hope, and hope rarely materialises. What happens is that the income does not come in, but the expenditure still ploughs on. What the Government are trying to do—and I believe that they are right to do it—is to get the income in before spending it. When we see the oil money come in—it may turn out to be the greatest bonanza that we have ever had and we hope that it will be good as well as a soporific for us—we can start to spend it. That will be a good thing for the Government to do.

For too many years we have sacrificed the long term for the short term. I believe that the long term has finally arrived. This Government—any Government—had to do something about the financial situation that we faced. I believe that these plans are as realistic as it is reasonable for them to be.

The Government's task is to lay down guidelines and to lead. That often means that is it is necessary for the people to change their attitudes on what they wish for their country. Governments usually create chaos. They do not usually lead. They often insist on being the benign State leader. They favour the womb-to the-tomb philosophy. They believe that they can do for people that which they cannot. Governments are usually fraudulent with people, because they offer a vision that they cannot meet.

If the Government lead and the people do not wish to follow—if they do not want to have a free economy, if they do not wish to have a prosperous country without inflation and if they do not wish to kill inflation—the Government cannot do very much. Government cannot be a dictatorship. If the unions will not co-operate in reducing wage demands that have not been earned, if civil servants insist on going way above what has been earned, if bank clerks insist on 22 per cent. from profits which they have not earned and which have been obtained because of the nation's problems, and if everyone insists on going ahead with inflation, Britain will have no genuine economic base in future, and within five years we shall have inflation of 30, 40, or even 50 per cent.

For the reasons that I have described, the policy that is being offered to us is sound. It is meant to be, not strength through misery, but strength through realism. It is the first plan to be introduced honestly by a Government who have some hope of success. However, they will be successful only if the people want to follow them. If they do net wish to do that, all that follows will be economic mayhem.