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Public Expenditure

Volume 979: debated on Thursday 28 February 1980

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asked the Prime Minister whether she is satisfied with the present proportion of the gross domestic product which is spent by the State.

I totally agree with my right hon. Friend, but may I ask for her assurance that the Government will now be bolder in cutting public expenditure? Does she agree that they could perhaps even emulate the previous Labour Government, particularly the performance of the right hon. Member for Leeds, East (Mr. Healey) when he was Chancellor of the Exchequer between 1976 and 1978? The right hon. Gentleman reduced public expenditure by £6,000 million, which amounted to 8·5 per cent. Does my right hon. Friend agree also that the right hon. Gentleman did that not out of political conviction but because he had brought the country to the brink of bankruptcy?

I agree with my hon. Friend that we need to cut public expenditure further, and there will be another White Paper at or about the time of the Budget. I totally agree that if we are to restore the private sector we must stop draining money from that wealth-creating sector into the public sector.

How does the right hon. Lady respond to the suggestion in the House and in the country that increasing numbers of Conservative Members are publicly dissociating themselves from the policies which she and her Government are pursuing, certainly with regard to the steel industry? Will she now in the national interest intervene in the dispute to bring it to an end?

With regard to the first part of the hon. Gentleman's question, perhaps he will await the result of the Division tonight. I believe that he will find that, as usual in this House, the majority will be right. With regard to the hon. Gentleman's suggestion that I should intervene in settling the steel dispute, as he knows full well, the word "intervention" usually means that the Government will provide more taxpayers' money. That I cannot do.

When considering reducing public expenditure, particularly local authority spending, will my right hon. Friend have regard to cutting bureaucracy rather than services? Will she and her right hon. Friends look carefully at whether local authorities plan to cut services rather than administration costs?

I very much agree with my hon. Friend. It is a source of great concern that sometimes local authorities seem to find it easier to cut services to the public than to cut administration, which could often easily be cut without reducing the standard of services. We shall draw that point to the attention of all our local authorities.

I am very sorry to disappoint the hon. Gentleman but I was present only right at the beginning of the meeting. As the hon. Gentleman will understand, I had rather a lot of other matters to prepare for today.