Prices

Part of Opposition Day – in the House of Commons at 9:28 pm on 19 June 1985.

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Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford 9:28, 19 June 1985

The hon. Member for Copeland (Dr. Cunningham) made a speech about a great many subjects which appeared to have little or nothing to do with the motion. I should like to to come back straight away to what has been the essential theme of the speeches in this debate on both sides of the House, and that is the whole question of prices in the economy.

It is a fact which seems to have escaped the attention of many Opposition Members that all services provided by the public sector have to be paid for by somebody. They can be paid for by charging, they can be paid for by taxes or they can be paid for by borrowing and leaving future generations to pick up the bill. We could have a sensible debate about the right balance between the methods of payment and about how much the public sector ought to provide in total. What we cannot do, it seems to me, is to have a sensible debate about prices in isolation. Any attempt to hold prices down in isolation from other factors means either that those services are starved of resources or, if the demand is to be met at the reduced price, that taxation and borrowing are higher than they otherwise would be because of the subsidies necessary to ensure supply.

Of course, a Government can always hold down public sector prices by giving subsidies, but the cost has to be paid by someone. There are two kinds of cost. If money is spent on subsidising a service — for example, bus fares, coal or water charges—something else on which that money might be spent goes without. It might be more investment in roads, opening new mines or repairing sewers.

The hon. Member for Rother Valley (Mr. Barron) referred to coal. What would the Labour party have done had it been faced with Mr. Scargill's demands last year? Would it have stood up to him and kept the subsidy under control?