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8.25 pm

Mr. Peter Brooke (City of London and Westminster, South): The hon. Member for Ellesmere Port and Neston (Mr. Miller) paid a compliment to my hon. Friend the Member for Wantage (Mr. Jackson), to whom I thought the House owed a genuine debt for using this occasion for so elegant an analysis of a subject very important to our national future, following so swiftly on the Adjournment debate on the same issue initiated by our mutual hon. Friend the Member for Buckingham (Mr. Walden), at which my hon. Friend the Member for Wantage was also present. It is an index of the House's occasional serendipity that the hon. Member for Ellesmere Port and Neston should have followed on a directly analogous topic. I shall, however, be briefer.

I apologise to the House for my absence from the debate for an hour, of which I advised Madam Speaker in advance. I have for the past 20 years been a trustee of a third-world trust, and chairman for the past 10 years or so, and the timing of our trustees' meetings is dictated by the availability of our director, who is often in the third world. I meant no discourtesy to the House.

This is the first time that I have revisited a public expenditure debate since July 1989. Had that year's Government reshuffle--what I choose to call a shuffle--occurred in September 1989 rather than in July, I should have become the longest-serving junior Treasury Minister since 1979.

Today's are arcane matters, yet they constitute 40 per cent. of our national economic activity. In the third of a century between 1945 and 1979, each ratchet of the economic cycle, regardless of who was in government, found us at the end of each relevant ratchet with the economic indices of inflation and unemployment worse than they had been at the end of the prior respective ratchet. My own public expenditure responsibilities during my four years in the Treasury were restricted to assisting the then Chief Secretary in certain regards detailed in the document "Ministerial Responsibilities" of that era. My role was essentially that of Oddjob, the title assigned by the noble Lord Healey to his then Chief Secretary, the noble Lord Barnett, in 1974.

However, I derive vicarious pride, taking a long perspective, from the fact that the high point of public expenditure in the mid-1980s was down to 45.5 per cent. as a percentage of national income and is down to 43.5 per cent. so far in the 1990s, by comparison with 47.25 per cent. in the 1970s. That is a wholly beneficent trend, markedly different from the post-war third of a century that I mentioned earlier, and reflecting the admirable control of public expenditure by Conservative Governments since 1979.

In terms of the current public expenditure plans, I will dwell for a moment on education where, in succession to my right hon. Friend the Chief Secretary, and a little before my hon. Friend the Member for Wantage, I served as Minister with responsibility for higher education in the early 1980s. I have noticed that the Leader of the Opposition has said that his party's priority is education, education, education. My right hon. Friend the Chief Secretary and I inherited from the Labour Government an age participation rate in higher education of one in eight. It is an index of the economic success and the imagination of the Government that, despite our rigorous control of public expenditure, the higher education ratio has now

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reached one in three. I share with the Leader of the Opposition an enthusiasm for expenditure on education, but I would respect him the more if he gave occasional credit for the scale of the achievement by the higher education sector over the past 18 years.

Earlier this week, I attended a rather scrappy conference put on by some bishops, about what they called the forgotten 30 per cent. I mean no disrespect to the hon. Member for Newham, North-East (Mr. Timms), who spoke there, when I call the conference scrappy. That description is a reflection of its unfocused format.

I am proud that the Government have increased public expenditure per pupil by 50 per cent. in real terms over the past 18 years. I hope that, in the coming years, the increased spending on schools in the present plans will lead to an improvement in performance by the bottom 30 per cent., to match the advances by the top 30 per cent. that I have just mentioned.

Sadly, the commonplace objection to selection in schools--that it condemns many to secondary modern education--has not insured us against an unsatisfactory level of performance among the bottom 30 per cent. in comprehensive schools.

In Northern Ireland, where there is 34 per cent. selection, deliberate attention to the bottom 30 per cent. achieved, at least for a period, an improvement in that sector swifter than any such improvement in Great Britain. That proves that improvement at that level can be effected by the application of intelligence and effort.

I have one last thing to say about the present public expenditure plans. I realise why my right hon. Friend the Chief Secretary finds it necessary to cut public expenditure in small Departments in the same way as in large. Large Departments would complain if he did not. But value for money is a key motivator of the Government, and my right hon. Friend will recall his time at the old Department of Education and Science, which I mentioned earlier.

I do not know about my right hon. Friend, or, indeed, about my hon. Friend the Member for Wantage, but during my time there, my detailed knowledge about expenditure in the area of my responsibility was far greater than it could ever have been when I was Secretary of State for Northern Ireland. I dare say the same might have been true when my right hon. Friend was at the Ministry of Agriculture, Fisheries and Food, or at the Department of Health.

Because of the greater familiarity with what one is spending, and thus the ability to be much more in control, in a small Department, I share the unhappiness of some of the clients of small Departments, because cutting those Departments causes them disproportionate damage, yet makes very little difference to the greater sum of things.

Having been rigorously objective about the Government's plans, I shall allow myself a moment of self-indulgence to comment on the public expenditure plans of Her Majesty's loyal Opposition. I appreciate that "plans" is an imprecise word to describe the aims and aspirations to which Opposition Front-Bench spokesmen periodically allude.

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Earlier tonight we heard the deputy leader of the Labour party, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), deliver an exegesis of his views on eye tests. As Lewis Carroll wrote:

It is noticeable that some of the pledges from which the Opposition claim that they have resiled have been repeated not once but twice, many of them since November last year, when they originally alleged that they had not been pledges at all. We cannot reasonably be blamed if we recall the words of the Bellman, another of Lewis Carroll's characters:

    "What I tell you three times is true".

The line that clear statements about the Opposition's intentions, with clear spending implications, were simply jeux d'esprit, or thoughts collected in a ramble through the woods, does not retain credibility if the risk-laden words are spoken time and again. Nor is disingenuousness about public accounting rules, as in the case of council house receipts, halfway to being an amulet. Labour spokesmen may convince themselves that they are protected by Humpty Dumpty definitions, but it is certain that the financial markets would exact an instant punishment for such disingenuousness.

Of course I acknowledge the fact that Treasury Ministers must make assumptions. Conservatives see virtue in learning from the past. In 1974, the Labour Government made assumptions that underestimated by £4 billion, in 1974 sterling, the level of their public sector borrowing requirement, on which they built their spending plans. From that, so many of their subsequent difficulties flowed. It is unreasonable of the Opposition to deny the Government the right to make assumptions about the Opposition's stated intentions of substance.

The Labour Government did not learn from their mistakes. After everything that they had done between 1974 and 1976, their public expenditure White Paper dated February 1976 began:

Those words are worth recording in the light of what happened later that year, and worth measuring against the pious words that the shadow Chancellor has latterly been uttering about his present intentions.

My right hon. Friend the Deputy Prime Minister referred to the privatisation of London Underground. The responses of the Opposition on the day that my right hon. Friend the Secretary of State for Transport announced that were embarrassing. They were inept, irrelevant and primaeval. However, all was explained within a week, when Conservative Members received a letter from Mr. Jimmy Knapp explaining why he was against the privatisation. His very opposition has implications for the public finances.

The vacuum on health policy in the Labour party is equally embarrassing, and this time it cannot be covered up by promises about increasing public expenditure. The vacuum has been there a long time, but it was previously concealed by public expenditure promises. As was once said of Mr. Asquith:

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As for pensions, the Opposition's knee-jerk reaction to the announcement by my right hon. Friend the Secretary of State for Social Security was the vividest of demonstrations that, to mix my metaphors, beneath the skin-deep pieties, the leopard has not changed its spots.

The Opposition will say that, despite their policy vacuum, they enjoyed the confidence of the electorate in the Wirral. They have paid us the compliment of adopting, hip and thigh, the commanding policies of the Government on economic management--but their attitudes to markets remain profoundly ambiguous.

The Opposition's imprecise statements about public expenditure have smacked of a communitarianism from the other side of the Atlantic, and of Michel Albert's propositions from this side of it, with their moral feel-good factor. However, the trouble with those theories is the fact that they blunt the rigour of markets, and are incapable of accurate calibration.

I appreciate the fact that those theories are, in part, a reaction to the wilder intellectual propositions of the new right in the United States. Forty years ago, in a course at the Harvard business school entitled, "Business Responsibilities in American Society", I was brought up to believe in the tenet that a private corporation has responsibilities to customers, to employees and to the community at large, as well as to shareholders. All hon. Members have in their constituencies hundreds of companies that pursue exactly the same policies, from many motives, of which intelligent self-interest is not the least.

It is, I fear, the miasma of communitarianism towards which a patently under-prepared Opposition seek to seduce the country. That is why this debate, and the Deputy Prime Minister's powerful expose, has been so valuable.

When I was in the Treasury, we had a saying that that which could not be measured did not exist. That proposition was once put to the test by the Foreign Office, which we all know and love, when there was concern about whether Mr. Ernest Bevin, who was then Foreign Secretary, would be able to get through the doorway between the main spare bedroom and the main spare bathroom in the Brussels embassy.

A telegram was sent to London saying:

The reply demonstrated what many of us had long feared--that the Foreign Office is more literate than numerate:

    "Unable verify diameter but circumference is 60 inches".

An inability to measure precisely is a hazard in the public finances, too. I quoted earlier the Bellman in "The Hunting of the Snark"--whose ending the House will recall. It is because the Opposition are pretending to be a Boojum, but we suspect that they are really a Snark, that we shall revisit this subject time and again before polling day.

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