Andrew Glynn

Save our Services

(March 1978)

From Militant, No. 397, 17 March 1978, p. 7.
Transcribed by Iain Dalton.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Andrew Glynn reviews the Government’s White Paper on public spending.

After the cuts of the past three years, many Labour Party members looked forward to a major expansion of the public services in the late ‘Seventies, in line with the Manifesto promises. The government’s public spending White Paper, published in the middle of January, has dashed these hopes.

Broadly speaking, current expenditure, on keeping the health and education services going and on social benefits, is planned to rise in line with ‘demographic factors’ – the number of people needing these services and benefits. Meanwhile, capital expenditure on new hospitals, schools, roads, etc. will hardly grow from its present, slashed level.

Overall, real public spending will rise at about 2% per year till 1980, but this will rule out practically any improvement in services, and with staff having to cope in older and older buildings in many sectors, further deterioration is inevitable.

Here are some ‘highlights’ of this wretched document:

In 1981 total investment by the public sector will be only three quarters of the level of 1973; increases between now and 1981 will make up for only about one sixth of the cuts made up to now.
Subsidies made by the government to hold down the prices of food, goods and services provided by the nationalised industries, housing, etc. will be cut by a further £500 million from the present level and by 1981 will be only slightly above one half of the 1974 level.
Local authority capital expenditure on housing in 1981 will be more than 10% below the 1974 level.
School building in 1981 will be less than one third of the level of 1972.
Hospital building in 1981 will be two thirds of the level of 1972.
Despite an increase in number of teachers employed of 9,500 as compared with previous plans, the total number will still fall by 21,000 between 1978 and 1981. So much of the potential benefit of falling numbers of school children in reducing class sizes will be lost.
Debt interest in 1981 will be double the 1974 level, and about three times the level of spending on school and hospital building.

No less horrifying than these details from the document, are the underlying assumptions on which it is written. For the government is planning for growth in the economy up to 1981 of no more than 3½% a year. Not that this isn’t an improvement on the last four years when there’s been virtually no growth at all.

But this should not hide the fact that the government is quite openly budgeting for mass unemployment on into the ’Eighties. The White Paper suggests that those receiving unemployment benefit will fall from 710,000 this year to 510,000 in 1981. What it never makes clear is how much of this fall is due to a fall in the total number out of work, or to fewer of those unemployed being eligible.

Any conclusion from those figures that unemployment will fall by almost a third would be quite wrong. With output only growing ½% faster than capacity (according to the government’s estimate of 3% capacity growth), and with current excess capacity around 20% (according to surveys of industrial capacity), it would take twenty years to reduce unemployment by one half.

No more obvious example of the bankruptcy of the government’s policies is imaginable. Any programme for regaining full employment rapidly must include a programme of public works to ensure the public services have up-to-date facilities.

But without real control of the economy, and without fitting the plan for public spending in a socialist plan for the expansion of the whole economy, any gains in reduced unemployment would soon be wiped out as firms took advantage of higher demand to restore profits to the level investors are demanding.

That is why the campaign against the Labour government’s cuts cannot be separated from campaign to implement a socialist economic programme.

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Last updated: 8 August 2016