Public Expenditure

Part of the debate – in the House of Commons at 4:43 pm on 20th February 1986.

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Photo of Mr John MacGregor Mr John MacGregor The Chief Secretary to the Treasury 4:43 pm, 20th February 1986

The right hon. Gentleman will have plenty of time to answer. Labour has also committed itself, at its 1983 party conference, to introducing a minimum wage of two thirds average earnings, costing another £1 billion from the public purse alone. This amounts to a legal obligation on the lower paid to price themselves out of work. I wondered whether the right hon. Gentleman might say that a 1983 conference pledge is no longer valid, but I see that the hon. Member for Oldham, West (Mr. Meacher) repeated the pledge in Tribune last week. I know that the right hon. Gentleman has already had to slap down his hon. Friend on one proposal, so perhaps he could say which member of the Opposition Front Bench will win on this one.

There are proposals to phase out independent schools, or have they gone too? That would cost a further £300 million, at a conservative estimate.

That all amounts to several billion pounds extra on the expenditure programme. I give it to the right hon. Gentleman that I am sure that he knows the lunacy of commitments on this scale. He knows the massive crisis of confidence that it would create in the economy, the huge inflation and the destruction of jobs on a scale that would rapidly outdo those that he was trying to build up. If he is to sound at all credible, he has to get some grip on his colleagues. The Opposition Front Bench have to come clean and stop pretending that they can undertake so many of these programmes.

The contrast is clear. The Labour party has a programme of massive public spending that would do immense harm to the economy and impose a tax burden on our people that they would find quite insufferable. The 41 per cent. VAT rate that I put to the right hon. Gentleman last week gave him the benefit of many doubts. We, however, have spending programmes that have enabled us to increase substantially in real terms the right priorities. They have contained the overall programme within what the nation can afford and contributed to the economic policies that have produced the longest period of sustained growth for many years. The White Paper continues that programme, and I recommend it to the House.