Public Expenditure

Part of the debate – in the House of Commons at 6:32 pm on 18th February 1987.

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Photo of Mr Willie Hamilton Mr Willie Hamilton , Central Fife 6:32 pm, 18th February 1987

Millions of people outside Parliament will wonder what the hon. Member for Bridlington (Mr. Townend) means when he says that taxes have been cut in the past six or seven years. Everybody who has objectively examined the situation knows that taxation, including direct and indirect taxes and national insurance contributions, have increased substantially since 1979.

I want to turn to the theme that was repeated by the Chief Secretary to the Treasury—value for money. We all want value for money, whether it is public or private money. I want to examine that proposition by reference to one or two problems.

I refer first to housing. The housing crisis that Britain faces is the worst that we have experienced in the past 50 years, perhaps even in the past 70 years. Public sector housing has been cut by two thirds since 1979, since the Government came to power, and total housebuilding—public and private—has declined by more than 100,000 a year. More and more houses in the public and private sectors are rotting through lack of maintenance. It has been estimated by, I think, the National Economic Development Council that we need to spend at least £18 billion just to preserve the existing stock of houses.

Let us consider the housing scenario. We have hundreds of thousands of building workers on the dole—brickies, plumbers, electricians, slaters and plasterers—who are all anxious to work. We have a large and increasing number of homeless families. We talk about the EEC mountains of beef and butter; we have mountains of building materials. The Monthly Digest of Statistics shows that in November 1986—the latest figures available—there were 328 million bricks lying around the country, 6·5 million sq m of plasterboard, 7 million tonnes of slate and 6·5 million tonnes of cement. We have the workers anxious to work and the building materials.

Local councils—the right hon. Member for Worthing (Mr. Higgins), who is the distinguished Chairman of the Treasury and Civil Service Committee referred to this matter—have a cash mountain from the compulsory sale of council houses of nearly £4 billion. That is £75 for every man, woman and child in Britain. The Government refuse to allow local councils to spend that money to employ those building trade workers to use those raw materials to build the houses for the countless hundreds of thousands who are waiting for homes. Is it value for money to leave these resources, whether they are manpower or the raw materials, in the stockyards all over the country? Is it value for money to spend £20 billion a year to keep between 3 million and 4 million people on the dole, including many thousands of building trade workers?

Let me give another example of value for money. The Chief Secretary to the Treasury quoted the reduction in the number of civil servants. That is true. However, the Public Accounts Committee and others have shown that the number of tax inspectors and investigators has been reduced, whereas it has been conclusively proved that, if they were employed, the amount of tax revenue that they could claw back out of the black economy would far outweigh the cost of their salaries. These are the false economies that the Government are pursuing. That point has been made repeatedly by the Public Accounts Committee, trade unions and others, but the Government just say that they have reduced the number of tax inspectors. That has resulted in the loss of millions of pounds of tax revenue.

I have referred to the cost of unemployment. The Government have presided over the highest unemployment in the history of the United Kingdom. We have never known a period when between 3 million and 4 million people—probably more—have been unemployed, not producing a single penny of wealth, and costing the taxpayer £20 billion a year. Is that value for money?

Let me give an example which is slightly smaller but just as important. We had a debate on the Royal Navy a few days ago. One of the points that was raised was the proposed privatisation of the royal dockyards in Rosyth and Devonport. No other major military power in the world has sought to privatise an asset which is so important to the national interest and particularly the defence interest. The Public Accounts Committee and the Defence Select Committee have said that the dockyards will cost more under privatisation rather than less. The Under-Secretary of State for Defence Procurement, who replied to the Navy debate, cited the exact figure that the Government would save—£320 million over the next 10 years, and more later—on the privatisation of Devonport dockyard. That was a meaningless figure. I do not know where it came from. I wrote to the hon. Gentleman asking how that figure had been arrived at. An assumption must have been made on the number of redundancies in the dockyard during that period. I challenge any Minister to produce a balance sheet to show how that money will be saved. Neither the Public Accounts Committee nor the Select Committee on Defence has supported that claim. On the contrary, they have said that it will cost more. That is the result of the Government's dogmatic approach to the problem.

I give another example—the police and law and order. If there is one item of public expenditure which has roared ahead since 1979 it is expenditure on the police and law and order. The consequence has been more crime—both violent and otherwise—than before in our history. The Government are throwing public money at the police and law and order, but the crime rates are increasing remorselessly. Value for money? I wonder. I have been burgled four times in 18 months. I have had the police there dusting their powder around my house, and never a word from them. There was no question of detection. That is what is happening under the Government.

The Government should not talk about value for money. Conservative Members should go to any university lecturer, any school master or any nursing sister in a hospital and ask them what is happening to public expenditure and value for money. University staff are leaving in droves to go to America and elsewhere because of the treatment received by the universities. This country's future depends more than anything else on the way in which we educate our children in our schools and our young men and women in our universities. Their treatment during the past seven or eight years has been a disgrace.

It is said that, if the Chancellor has the bonanza which we believe he has, there are various ways to use it —hand it out as an election bribe, use it in the interests of the Tory party, use it to invest in services, whether they are schools, universities, roads, railways, transport infrastructure or housing—or hand it to the taxpayers who, in the main, will be those who need it least. We are in good company when we say that it is in the national interest that that cash should be spent on improving the national economy in the short and long term—training, education facilities, housing and the rest.

The Tory Reform Group has written an open letter to the Chancellor of the Exchequer. There may be Conservative Members present who are distinguished presidents or vice-presidents of that organisation. Many Ministers have held those posts, including the Secretary of State for Energy, who I think is now the honorary president. In the letter, the Tory Reform Group argues any revenue the Exchequer has to disperse should be concentrated on investment in housing, urban renewal and in our nation's infrastructure in order further to reduce unemployment. The primary target should be to get the building trade workers employed—take them off the £20 billion a year which is paid in unemployment benefit and get them building houses, factories and the rest. That is what the Tory Reform Group says. Why is the Secretary of State for Energy not here saying, "Hear, hear" to that? The Tory Reform Group's past vice-presidents include several Ministers in the present Government who would all unite with us in saying, "We must get the economy moving. To hell with the election results for the Tory party. The national interest is far more important than the Prime Minister's ego." The right hon. Lady is the greatest disaster that the country has had in living memory. We shall pay the price.

I think that the Financial Secretary to the Treasury is a wet, or he was. He might have dried out since he became a Minister.