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House of Commons

Wednesday 13 April 1994

The House met at half-past Two o'clock

PRAYERS

[ Madam Speaker-- -- in the Chair ]

DEATH OF A MEMBER --

Madam Speaker : I regret to have to inform the House of the death of George Robert Cryer, esquire, Member for Bradford, South, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the honourable Member.

NEW WRIT --

For Rotherham constituency, in the room of Jimmy Boyce, esquire, deceased.- - [Mr. Derek Foster. ]

Oral Answers to Questions

TRADE AND INDUSTRY --

National Consumer Council --

1. Mr. Martyn Jones : To ask the President of the Board of Trade what further assessment he has made of the impact on consumer advisory services of his reduction in the grant of the National Consumer Council.

The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin) : I am confident that the National Consumer Council will continue to promote and safeguard the interests of consumers as a whole.

Mr. Jones : How can the Minister justify that statement after making a cut in the grant to the National Consumer Council ? When will he restore that cut to protect consumers in this country ?

Mr. McLoughlin : The hon. Gentleman will recognise that the National Consumer Council has done well over the years with funding increases, from some £0.32 million in 1975-76 to £2.47 million in 1994-95--an increase of some 80 per cent. in real terms. I think that that shows the Government's commitment to the National Consumer Council.

Mr. Riddick : Does my hon. Friend agree that, while consumer bodies such as the National Consumer Council have a role to play, consumers' interests are best served by maximising competition within free and open markets ? Is that not what the Government have been achieving over the past 15 years through the rigorous use of competition policies and, most important, by privatising the old state-owned nationalised industries so that consumers' interests now take top priority ?


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Mr. McLoughlin : I am grateful to my hon. Friend. He is absolutely right. We have seen time and again that competition reduces prices. Perhaps the most outstanding example of that is telecommunications.

Balance Of Trade --

2. Mr. Grocott : To ask the President of the Board of Trade what was the balance of trade in manufacturing products in (a) 1979 and (b) the latest year for which figures are available.

The Minister for Trade (Mr. Richard Needham) : In 1979, the United Kingdom had a surplus of £2.7 billion in manufactured trade. In 1993, there was a deficit of £7.8 billion. Since 1979, the volume of UK exports of manufactures has grown by 60 per cent.

Mr. Grocott : As the Minister mumbled those disgraceful figures into the Dispatch Box, perhaps I can spell them out a little more clearly. The £2.7 billion surplus in 1979, in real terms, at current prices, would be a £6.8 billion surplus which, after 15 oil-rich years, is now a £7.8 billion deficit. What is the latest Government thinking about a scapegoat for that ? Is it the foreigners, the unions, or Labour local authorities ? Is it too much to expect the Minister to give us a parliamentary first today and stand at the Dispatch Box and apologise to the country for representing a Government of the most appalling economic and industrial incompetence ?

Mr. Needham : If the hon. Gentleman thinks that Labour-controlled local authorities have anything to do with the manufacturing decline of this country, he lives in cloud cuckoo land, as do most of his hon. Friends. If he and his colleagues had been in power, there would have been no reform of the trade unions, no privatisation of public utilities and every business man in the country would have fled because of the tax impositions advocated by Labour Members.

Mr. Nicholas Winterton : As one of those hon. Members who, probably more than many others, recognised the vital role of manufacturing industry, I fully support the Government's new approach to it and their recognition of its importance. Will my hon. Friend ensure that the Government continue to create the right climate for the expansion of manufacturing industry, especially low inflation and low interest rates which are essential to the success of this vital sector ?

Mr. Needham : Yes.

Mr. Malcolm Bruce : When does the Minister expect to publish his report on the competitiveness of British manufacturing industry ? Will he set out in that report his Department's priorities specifically to rebuild the British manufacturing base so that we can secure the advantages of the post-GATT eighth round ? Will he be prepared to build into that incentives for companies that make long-term commitments to research and development and innovation in order to counter the short-termism which so often discourages such enterprise ?

Mr. Needham : I am sure that my right hon. Friend the President of the Board of Trade will have noted what the hon. Gentleman has said.


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Mr. Robin Cook : The Minister invited the House to imagine what would have happened had there been a Labour Government in power. Why does he not admit that if a Labour Government had transformed a surplus of £7 billion at 1993 prices to a deficit of £7 billion in 1993 he would be demanding that they resign ? Why does he not take that message himself ? Why does he not admit that the cumulative surplus under Labour was more than £80 billion and that the cumulative deficit under the Conservatives has been more than £80 billion ? Is that not the real measure of the appalling damage done to our manufacturing industry by 15 years of Conservative rule ?

Mr. Needham : If the hon. Gentleman, with his total lack of understanding and knowledge of industry, had been in power, the deficit would have been £17 billion rather than £7 billion. If he examined the percentages for a moment, he would find that the deficit now is 1 per cent. of gross domestic product and the surplus in 1979 was 1 per cent., so the difference is about 2 per cent. That total number in terms of the size of the economy, when compared with the increase in the surplus on services, is almost meaningless.

Mr. Oppenheim : Is it not a fact that our balance of trade in manufacturing was falling very sharply in the 1960s and 1970s and especially in the latter part of the 1970s but that since then our record in manufacturing exports, output and productivity has for the first time since the war been better than the average of our main competitors ? Does that not mean that in the past 15 years we have made up much of the ground lost when Labour was implementing its industrial strategy to turn British Steel into the world's largest loss maker and British cars into the butt of international music hall jokes ?

Mr. Needham : My hon. Friend is absolutely right. To cite just one statistic, in the three months to the end of February our exports to Asia have risen by 25 per cent. in value. In the same three months last year, they rose by 11 per cent. in value. Britain's success in increasing our manufacturing exports is unrivalled by that of any other country.

National Association of Citizens Advice Bureaux --

3. Mr. Turner : To ask the President of the Board of Trade what further assessment he has made of the impact on consumer advisory services of the real-terms reduction in grant to the National Association of Citizens Advice Bureaux.

Mr. McLoughlin : The National Association of Citizens Advice Bureaux plays an important and valuable role in its support of local citizens advice bureaux. We have more than doubled the grant in aid paid to NACAB in real terms since 1979-80, and I am confident that maintaining the grant in 1993-94 will enable it to provide continued support.

Mr. Turner : The Minister did not mention that he has cut the grant to citizens advice bureaux for the current year. Citizens advice bureaux in the west midlands, an area which he knows very well, last year received the largest number of inquiries of any region in the United Kingdom, but they will be unable to provide the same level of service to consumers in the forthcoming year. When does he intend to make good the cuts ?


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Mr. McLoughlin : As I have explained, there have been no cuts. However, I am glad that the hon. Gentleman referred to the west midlands, as I hope that he will join me in congratulating Conservative-controlled Wolverhampton council on increasing the grant paid to the citizens advice bureaux in his own constituency. When the Conservatives took control, they increased the grant by some 25 per cent. I am glad to hear the hon. Gentleman congratulate them on the excellent job that they are doing.

Maritime Borders --

4. Mr. Trimble : To ask the President of the Board of Trade if he will make a statement concerning the representations made by his Department to the European Commission concerning Interreg 2 and maritime borders.

Mr. Needham : Northern Ireland does not qualify for a sea border Interreg programme because it does not have an international sea border with another member state. However, the Government are confident that there will be increased support for Northern Ireland under a successor to its Interreg programme with the Republic of Ireland.

Mr. Trimble : Does the Minister not appreciate that if the Interreg 2 programme remains confined to maritime borders and is not expanded to include maritime regions, as would be consistent with the policy, Northern Ireland and Scotland will suffer in comparison with the southern corridor through north Wales to Dublin ? Does he understand our annoyance that when our European representative, Jim Nicholson, went to the European Commission, the Commissioner told him that he was sympathetic but that the Department of Trade and Industry was being unhelpful ? Does the Minister not realise that his duty is to represent not only England and Wales but the whole of the United Kingdom, including Northern Ireland and Scotland ?

Mr. Needham : I do not need any lessons from the hon. Gentleman about representing the whole of the United Kingdom. The land element in Interreg 2 is much larger than the maritime element. There is no justification for the comments that the hon. Gentleman alleges were made to Mr. Jim Nicholson. It is vital to ensure that Northern Ireland, especially Belfast, gets a reasonable proportion of the land element of Interreg 2, which can be used to ensure that Belfast and other ports in Northern Ireland remain competitive with those of the south. The Government continually tell the Commission that there must be no unfair subsidies that would put the ports of Northern Ireland at a disadvantage.

Dr. Spink : Is my hon. Friend aware of the current deliberations on the Interreg 3 programme, and how important it is that south-east Essex should be successful in its application, so as to develop its infrastructure and therefore improve its manufacturing

competitiveness ?

Mr. Needham : I am sure that the Department of Trade and Industry will ensure that those arguments are heard loud and clear in the Commission.

Mr. Wigley : Will the Minister give a commitment that the Government's promise to give top priority to the links not only between Holyhead and Dublin but between


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Pembroke and south-east Ireland still stands, and that they are working on it ? Will he confirm that in Wales the Welsh Office will be in charge of administering the programme ?

Mr. Needham : As I understand it, the local Departments will administer the programme. Representations are being made to the Commission and the results, including those relating to the hon. Gentleman's suggestion, will be known in June. I repeat what I said about the need to ensure that all the ports in the United Kingdom are treated fairly.

Competitiveness, Buckinghamshire --

5. Mr. Lidington : To ask the President of the Board of Trade what steps he is taking to encourage the competitiveness of industries in Buckinghamshire.

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Michael Heseltine) : Under the Government, wnow have the lowest interest rates for nearly 20 years, manufacturing productivity at an all-time high, and we have the lowest underlying inflation for the past 26 years. Investment in plant and machinery is up nearly 50 per cent. since 1979.

I am pleased to announce that a new business link in Aylesbury is expected to open in June. We shall announce our further policies on competitiveness in a White Paper to be published soon.

Mr. Lidington : Does my right hon. Friend agree that in a competitive world economy it is important not only for large British companies but for small and medium-sized companies, which form the majority of employers in places such as Aylesbury, to get used to exporting as part of their regular business planning ? Will he ensure that the welcome new business link office in Aylesbury, and other measures adopted by the Department, will provide advice to enable small and medium-sized employers to go out and break into overseas markets ?

Mr. Heseltine : I am extremely grateful to my hon. Friend. Like many people, I believe that job creation in the future will come from the small and medium-sized business sector. We in the Department of Trade and Industry are determined to reinforce the efforts of that vital part of the British economy by providing a first-class advisory service through the business link movement. We are also determined to push on with the export promoter initiative, which has now attracted about 75 secondees from the private sector to my Department to help and advise the small companies that we wish to see pioneer export markets.

Fuel Bills (Early Payment) --

6. Mr. Kevin Hughes : To ask the President of the Board of Trade when he will be meeting the gas and electricity regulators to discuss the effect of the early payment of fuel bills.

The Minister for Energy (Mr. Tim Eggar) : I meet the gas and electricity regulators from time to time. They are responsible for monitoring the performance of the gas and electricity companies on their regulated business.

Mr. Hughes : At those meetings, will the Minister put pressure on the regulators to ensure that any profits made by the power companies from advance payments will be


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returned to the customers in terms of reduced bills, especially for those who could not afford to go through the loophole, as the wealthy did, and make advance payments ? Will the Minister put pressure on so that those least able to afford the bills will have a reduction ?

Mr. Eggar : That is a matter for the companies-- [Hon. Members :- - "Why ?"] I have noticed that Midlands Electricity has announced that £500,000 of income derived from interest from pre-payments will be donated to the Neighbourhood Energy Action Trust. I very much congratulate Midlands Electricity on that initiative.

Mr. Congdon : Will my hon. Friend draw to the attention of the regulators the fact that consumers are pleased by the substantial reductions, in real terms, in their energy bills since the privatisation of the once state-owned monopolies ?

Mr. Eggar : I absolutely agree with my hon. Friend. The position is in stark contrast to Labour's record when in power, when electricity prices rose by 22 per cent. between 1974 and 1979.

Mr. O'Neill : Is the Minister aware that a number of the regional electricity companies have misled their consumers ? East Midlands Electricity has on its form :

"VAT on electricity--There is no need to make an additional payment and East Midlands Electricity does not encourage you to do so." Yet in the next sentence, the company says :

"Additional payments can be made using the payment slip below." Those contradictory statements were designed to mislead consumers. Surely the least that the Government can do is to point out to the regulator the misleading statements, and the way in which the companies are fleecing people and making vast profits. Neighbourhood energy schemes are just a drop in the ocean compared with people's suffering as a consequence of the 8.5 per cent. increase.

Mr. Eggar : As I understand it from what the hon. Gentleman said, the company was telling consumers about the choice available to them. The nature of the hon. Gentleman's question reveals all. If he were Minister for Energy, which God forbid, he would be saying exactly what must be done in terms of billing and what consumers must do, depriving consumers of all choice.

Mr. Brazier : With regard to the early payment of bills, will my hon. Friend join me in congratulating my constituent, Mrs. Scott, whose home I was privileged to visit on Monday ? She has come up with a far more effective way to reduce her fuel bills, using the Government's splendid new home insulation grants which are now available to all pensioners.

Mr. Eggar : I will, of course, congratulate Mrs. Scott and my hon. Friend. I dare say that the scheme will go particularly well in Midlands Electricity areas as I suspect that it has been funded with the help of the Neighbourhood Energy Action Trust.

Utility Regulators --

7. Mr. Battle : To ask the President of the Board of Trade if he will review the power of the utility regulators over high charges and preferential boardroom share options.


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The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton) : The utility regulators have sufficient powers to protect consumers' interests over a range of issues, including prices. The remuneration of company directors is a matter for the company concerned and its shareholders.

Mr. Battle : Is the Minister aware that the chairman of Yorkshire Water, Sir Gordon Jones, stands to make £260,000 profit on his share option deal, but is giving many of my constituents the single option of accepting expensive, unaffordable metering ? All other water consumers have no option but to pay unacceptable and extortionate charges. When will the Minister give real power to the regulators and redress that injustice ?

Mr. Hamilton : If the hon. Gentleman is so concerned about the arrangement, I suggest that he buys some shares in the company, attends the annual general meeting and speaks out there. In general, the position is substantially improved compared with that under the Labour Government, when such individuals were paid large sums for turning in large losses, which were ultimately subsidised by taxpayers. Now, at least, profits are being divided, part among employees and part among directors. That seems a significant improvement.

Mr. Ian Taylor : Is it not typical of the Opposition to show envy about the success of companies and the share option schemes, which are valuable only because the companies have done very well ? Is it not a fact that many of the executive share option schemes about which the Opposition complain are linked to employee share option schemes, which are also valuable if the company has done well ?

Mr. Hamilton : I agree entirely with my hon. Friend. That is an important element in providing incentives to companies to become more efficient, which is in the general interest of consumers. As the answer to the question of the hon. Member for Leeds, West (Mr. Battle) shows, never has the difference between the two parties in the House been so amply demonstrated. As defined by Winston Churchill, while capitalism involves the unequal sharing of blessings, socialism means the equal sharing of misery.

Mrs. Helen Jackson : Is the Minister aware of the extreme public anger and fury in Yorkshire about the actions of the water regulator, who has extended his power through the President of the Board of Trade despite numerous letters from Members of Parliament on both sides of the House, thus allowing the chairman of Ofwat's Yorkshire customer services committee to be sacked by the regulator ? Does that not smack of power, patronage and preference, which is out of place in a public service such as the water industry ?

Mr. Hamilton : It is a bit of a cheek for a Labour Member of Parliament to accuse the Government or any organisation such as Ofwat of nepotism or partiality. It was, after all, the last Labour Prime Minister who appointed his son-in-law as Her Majesty's ambassador in Washington. The director general of Ofwat gave evidence this morning to the Select Committee on the Environment and I am sure that he is capable of defending himself. Ofwat has rejected claims that the director general has


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acted in any way improperly in making appointments to the customer services committee. Of course, a balance must be drawn between experience and turnover.

Trade Missions --

8. Mr. Gallie : To ask the President of the Board of Trade if he will list the countries in the far east to which it is planned to send trade missions supported by his Department.

Mr. Needham : There are currently plans for six ministerial visits to the far east, including trade missions, in the remainder of the year. On present plans, I hope that on those missions I will visit Malaysia, Indonesia, Japan, Thailand, Taiwan, South Korea, Vietnam, the Philippines and China.

Mr. Gallie : Will my hon. Friend accept my appreciation of the recent support that he has given to the Jetstream aircraft in my constituency ? Is he aware that Jetstream has recently established a spares department in Singapore to service an increasing fleet ? Will he ensure that on future trade missions Jetstream aircraft will be promoted as first- class aircraft and that the back-up services will also be promoted as first -class services ?

Mr. Needham : I am only too delighted--I am sure that I also speak for my right hon. and hon. Friends--that any mission that we take to the far east should include companies from my hon. Friend's constituency. I also extend that invitation an all hon. Members. If there are companies in their constituencies which they think can export successfully to the far east, we should be only too delighted to include them. As a result of the missions that we have undertaken over the past two years, sales to Singapore were up some 30 per cent. in 1993 on 1992 and some 30 per cent. in the first three months of this year. That is true throughout the whole of the far east and I am sure that that will continue to be the case.

Mr. Bell : With due respect, the House welcomes the Minister's globe -trotting activities, but in response to the question of my hon. Friend the Member for The Wrekin (Mr. Grocott) is it not a fact that our world trade has steadied while that of France has increased ? On his missions abroad, does the Minister think that our embassy and high commission staff are sufficient for the job or do we need more ? Are we sure that the dead hand of the Treasury is not lying across our exports ? What can the Minister do to ensure that there is a level playing field for the British when dealing with the French, the Germans and the Americans and not a tilted playing field ?

Mr. Needham : Our strategy, which has developed over the past two years, gives us a business plan in each of the major markets of the world and these are supported by the posts overseas. We discuss staffing levels through the joint export promotion directorate, and at present I have no indication from it that we are below strength or below the plans that we have set out. We are showing British industry--I am glad that we have its support--that we are giving it as good a service as that received by any company in any country anywhere in the developed world.


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Business Confidence --

9. Mr. Peter Ainsworth : To ask the President of the Board of Trade if he will make a statement on business confidence.

Mr. Heseltine : All the major business surveys show that British industry is increasingly confident about the future.

Mr. Ainsworth : Does my right hon. Friend agree that that confidence is rooted in the fact that Britain is now a low interest rate, low inflation and growing economy-- [Interruption.] --attributes which Labour Members appear to find derisory--and that we also have a relative competitive edge in Europe and the world which Opposition party policies would jeopardise, probably at the cost of millions of jobs, through their socialist and strikers' charters ?

Madam Speaker : Order. I need hardly remind hon. Members yet again that it is the Executive who are being brought to account during Question Time. It is not an Opposition party which must have its policies questioned but the Executive.

Mr. Heseltine : I agree with my hon. Friend. The fact is that since 1981, the volume of United Kingdom manufactured exports has grown faster than in France, Germany, Italy and Japan.

Mr. Mandelson : Does the Minister accept that business confidence in the northern region was greatly knocked by the Government's decision to cut the grant to the Northern Development Company ? In view of the continuing success of that company--of course, local authorities and the private sector are maintaining their commitment to the NDC--and as the northern region is crying out for jobs and investment, what possible sense could there have been in the Government's decision ?

Mr. Heseltine : The confidence of the business sector in the north will be affected by the state of the order book and the effectiveness of its ability to compete. That is what matters to industrialists. We will do our best to continue to support them within the resources available to my Department.

Sir David Madel : In relation to business confidence in Bedfordshire, my right hon. Friend is aware of the situation of Lancer Boss Trucks in Leighton Buzzard. Can he assure me that his Department will do all that it can to help the receiver to sell the company as a going concern so that manufacturing jobs in the fork-lift truck industry in Leighton Buzzard, Bedfordshire, can be retained ?

Mr. Heseltine : I am extremely grateful to my hon. Friend. [Interruption.] I should have thought that the House would want to hear about this extremely important matter. It is extraordinary that when jobs and investment in manufacturing industry are at stake, Labour Members seek to turn it into a national joke. The fact is that Ministers and officials have already been in touch with both the company and the receivers. My Department will do all that it can to assist, but it cannot become involved in the receivers' administration of the case. However, there seems to be a good prospect of an offer being made for the Lancer Boss group as a whole.


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Mr. Fatchett : For a Government who claimed that business confidence depended on the level of taxation, how does the President of the Board of Trade explain to business people the fact that the Government have increased taxes to a record level and imposed a savage increase in taxation on every family in the country ? Is not that another example of the Government's economic incompetence damaging Britain's business interests ?

Mr. Heseltine : The hon. Gentleman cannot have heard what I said. All the latest business surveys show growing confidence. The reason for that growing confidence is that British industry wants a competitive exchange rate, rising productivity, low inflation and low interest rates. Under this Government, it is getting all four.

Jobs And Exports --

10. Mr. Paice : To ask the President of the Board of Trade what assessment his Department has made of the average numbers of United Kingdom jobs created or maintained for every £1 billion earned by United Kingdom exports.

Mr. Needham : The best available estimate is that £1 billion of visible exports is likely to be associated with around 30,000 jobs.

Mr. Paice : Does my hon. Friend accept that that clearly demonstrates what many of us have known for a long time : Britain has and always will be a trading nation and we must export to provide jobs and the wealth of the country ? Does not last week's announcement that British car exports to Japan increased by 30 per cent. demonstrate that we are now in a competitive situation ? Is not it time that we recognised that competitiveness and a flexible labour market go together, and those who would impose regulations on our labour force and load burdens on our employers would destroy competitiveness, destroy exports and destroy jobs ?

Mr. Needham : I agree with my hon. Friend. We have a competitive industry. We must do everything that we can to ensure that it stays that way, and the most important thing is to deny power to the Labour party.

Mr. Winnick : If all is so well, as the President of the Board of Trade and the Minister have repeatedly said this afternoon, why is there such a lobby on the Tory Benches for the President of the Board of Trade to replace the Prime Minister ? Is not it a fact that many Tory Members find the present situation in the country so appalling that they want to replace the Prime Minister with the President ?

Madam Speaker : Order. As I said earlier, this an opportunity to question Government policy, not to question individuals or Opposition policies. I suggest that the Minister replies to the first part of the question.

Mr. Needham : The second part of the question made me so cross that I have forgotten the first part.

Madam Speaker : I call Mrs. Lait. Let us have a sensible question from a woman.

Mrs. Lait : I will try to restrain my anger. When does my hon. Friend expect accurate statistics from the European Union about trade within member states ?


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Mr. Needham : I cannot give my hon. Friend an exact estimate. I have no reason to believe that the way in which the statistics are collected here means that they are any less competently done or accurate than they are in other European states. There is a bedding-down period and it will affect the balance of trade figures in all the countries of Europe for some time yet.

Gas Consumer Council --

11. Mr. Berry : To ask the President of the Board of Trade if he will assess the impact of the reduction in the Gas Consumer Council's budget on the availability of advice to the public on gas safety.

Mr. Eggar : The Gas Consumer Council has indicated that it expects to be able to carry out all its functions within the budget allocated for 1994-95.

Mr. Berry : In that case, can the Minister say why only this morning the Gas Consumer Council told me that the impact of the cuts would be borne by leaflets and the provision of information ? Does he ask me to believe his account of the impact on safety campaigns in the gas industry, or to believe the Gas Consumer Council's account ?

Mr. Eggar : My understanding is that the Gas Consumer Council is confident of being able to carry out its current functions. It will have to absorb a small reduction in its budget, in accordance with the necessary restrictions on public expenditure as a whole, but it is absolutely typical of the Opposition parties that they fail to recognise that the alternative to reductions in public expenditure is increases in taxation.


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