I fully support my right hon. Friend the Chancellor in his insistence that we must tackle inflation as a top priority. Like everyone else, I welcome the modest cut in interest rates today.
I support the Government's cautious approach, which is much more sensible than that suggested by the six economists in The Times today. In that respect, I think that the Government are on course.
Nevertheless, we must ask ourselves why we are in this position and why inflation has gone so high. In the past 11 years, the Conservative Administration have done a wonderful job in the private sector. Very few businesses in the private sector are inefficient or overmanned, as that was shaken out long ago and it brought about the successful period that we enjoyed. However, we have dismally failed in the public sector, where there is enormous overmanning in all areas, and we must apply our minds to reducing it. At every turn there is waste. The health service has no decent management and never will have until it is put on to a totally different basis. The worst offenders are local government, which employs 1 million more people now than in 1960.
What upsets me most about the autumn statement is that we are pouring more money into trying to make the unworkable poll tax work. We shall never succeed, and the sooner we recognise that the better. The community charge was a major mistake—an albatross around our necks—and we must get rid of it. I suggest that we get rid of this awful system before 1 April 1991 by a simple repealing Act—a one-clause Bill. We could then increase VAT in the Budget by 7 per cent. Everyone would pay and would pay according to their means, and the horror of the poll tax would be out of the way. It would be a major mistake to have another full year of the tax because it will have to rise considerably, especially as so many people have not paid.
I also draw attention to some of the extravagances that we tolerate in the public sector. Although it is commonplace to criticise bureaucracy and to say that we have too many administrators, we should ask a few other questions, for example, about teachers. We have 70,000 more teachers than we had in 1970—although I do not think that the education results are any better—and 735,000 fewer pupils. Any firm that operated on such a basis would soon be in dire trouble.
Then there is the health service. It is not only the administrators who are causing the problem. We are always boasting that 54,000 more nurses have been employed since we came to power, but we also have 90,000 fewer bed patients. Every time we engage an extra nurse, we lose one and a half beds. That needs urgent investigation: it is high time that the health service was put under proper management.
The Treasury forecasts are abysmal. No wonder: there are no real accounts anywhere in the public sector. The time has come for normal commercial and capital accountancy to be exercised in every sector of Government. We are deceiving ourselves at present; we are, as it were, flying blind.
It is obvious to hon. Members on both sides of the House, if they are honest, that we cannot get inflation down without a rise in unemployment. That is the simple truth. It is therefore not surprising that unemployment is now rising; we have been hiding it for several years by creating all sorts of strange training courses, which have not been very successful. I believe that potential employees can be trained only by the firms that are going to employ them. This training business has been a very expensive racket.
We must think again about how to deal with unemployment. For some reason, the Government have set their mind against the workfare scheme that the Americans have adopted extensively. Unemployment in Britain is set to rise, and shaking out the overmanning in the public sector would cause it to rise still further. We, too, should introduce workfare, instead of allowing millions of people to be paid to do nothing. So much work needs to be done that we cannot afford to continue in this way.