Autumn Statement

Part of the debate – in the House of Commons at 9:30 pm on 6 December 1984.

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Photo of Mr Peter Rees Mr Peter Rees , Dover 9:30, 6 December 1984

No. I hope that I have dealt fairly with the points made by the hon. Gentleman and I have many more to answer.

It is true that there has been no adjustment to the totals, in spite of the abolition of the national insurance surcharge. However, it is the convention that, with cash planning, not every such change calls for an adjustment of the planning totals. Otherwise, changes in, for example, corporation tax and VAT, which might work the other way, would have to be reflected in the totals.

Debt interest was the subject of another charge made by the Select Committee. Since 1979–80, debt interest has not formed part of the planning totals, because the amount of interest is too volatile for it sensibly to form part of a control total. However, it is, of course, taken into account in the overall strategy of the Government.

The third substantial criticism made by the Select Committee is that the Government are unlikely to keep their expenditure within the 1985–86 planning totals. I remind the House that this is the fourth year in which Government Departments have been planning in cash. In each year since March 1982, with the exception of the current year, the outturn has been within the White Paper totals. That is not a bad record. However, I candidly admit that the overshoot for the current year is likely to he about £1·5 billion.

Naturally, that is a matter of profound regret to me, but let me identify two of the main causes of the overshoot. The first is the miners' strike. I do not think that, on any fair view, that industrial encounter could or should have been foreseen when last year's autumn statement was prepared and debated. Nor do I believe that the miners' strike should be regarded as a precedent for future years. If Labour Members encourage their friends in the trade union movement to repeat that sort of encounter, the country will be able to judge their dedication to the welfare of their fellow countrymen.

The second item is the likely current overspend by local authorities, which could total as much as £1·2 billion this year. We have taken stern measures to ensure that such an overspend should not be repeated next year. First, an extra £900 million has been allocated for local authority current expenditure, a tougher holdback regime will be instituted and the 18 local authorities that, together, account for 80 per cent. of the overspend will be rate-capped. That demonstrates the purpose behind that measure.

Beyond that, we shall have a contingency reserve of £3 billion. Some have criticised us for reducing that sum from the £3·75 billion which appeared in the public expenditure White Paper. It is reasonable to have a larger reserve for later years—the greater the distance in time, the greater the uncertainties—but, beyond that, we have allocated an extra £2 billion to certain demand-led programmes—the intervention board's purchases, the Export Credits Guarantee Department and the social security programme.

I turn with less relish to the rather bombastic intervention of the right hon. Member for Sparkbrook As we know that he is a kindly person, we were sorry indeed that he should have traduced my right hon. Friend the Chancellor in the way that he did. I hope that we shall be able to maintain the courtesies of debate. I am sorry that such a genial figure as the right hon. Gentleman should try to project himself in a cold, cutting role.

The right hon. Gentleman identified unemployment as the crucial issue, but he posed a wholly bogus dilemma between cutting taxation and cutting unemployment. That is not a dilemma that I recognise. It is possible, and over the course of time the Government's policy will demonstrate, that both taxation and unemployment can be cut.