Public Expenditure

Part of the debate – in the House of Commons at 8:08 pm on 7 May 1980.

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Photo of Robin Cook Robin Cook , Edinburgh Central 8:08, 7 May 1980

The Select Committee took evidence from the permanent secretary. My colleagues and I pressed him closely on how the British Rail component had been made up for insertion in the table. Table 1.4 consists of figures written down on paper. It is pointless to discuss whether they are projections, assumptions or targets. They are merely figures written down on paper with no serious analysis under-pinning them, with no serious attempt to work out in detail how they are arrived at.

All that comes out forcefully from that paragraph in the White Paper is that the bulk of the transformation is to be achieved by added charges. The White Paper is explicit about that. It says that the increase in the repayment of the nationalised industries and the cut in their borrowing powers assume that the gas and electricity industries will be taking steps to eliminate under-pricing over the period. Not many of our constituents would agree that gas and electricity are under-priced. Not even the gas and electricity industries would agree. They will be expected to make major increases in their prices and profits to achieve the figures in the table, if they can be achieved at all.

It is coming home to an increasing number of members of the public that, when the Government talk about public expenditure savings, they are effectively talking about increases in public service charges. Several hon. Members have referred to the substantial cut in housing expenditure. The hon. Member for Dundee, East (Mr. Wilson) wanted to know why housing had been singled out for a particularly savage cut. I can tell him. It is because expenditure on rents can be passed on more easily than can expenditure on other sectors to which he referred by comparison. That cut presupposes that there will be a substantial increase in real terms in the rents of public sector houses.