§ On 2 December I announced the Government's public expenditure plans for 1982–83. Today we are publishing the annual public expenditure White Paper. This sets out the plans for next year in more detail and also contains our provisional proposals for the two following years. At the same time, the Supply Estimates for 1982–83 are being presented to the House. The House will note the new and greatly improved presentation in the White Paper which I certainly find much easier to follow.
§ In the last two years these documents have been published on Budget day, so that all the information would be available at the same time. In this way the Budget debate can cover both sides of the account. The Select Committee on the Treasury and Civil Service is, I know, considering the handling of these matters, and I await its recommendations with interest.
§ I explained to the House in December why we had decided to increase planned spending in 1982–83 by some £5 billion compared with the plans set out in last year's White Paper. The increases included some £1.3 billion of extra finance for the nationalised industries, £500 million more on defence, and another £800 million on special employment programmes. They were partly offset by a general reduction in most cash limited expenditure.
§ Although most of the measures which I shall announce today involve reductions in taxation, I am also proposing some additions to public expenditure, totalling some £350 million in 1982–83. This includes an increase of £150 million in the Contingency Reserve to accommodate some of the expenditure measures. This brings the reserve in 1982–83 to £2,400 million. The planning total for 1982–83 given in the White Paper is £115.15 billion, in cash, compared with £110.2 billion, which is the cash equivalent of last year's projections for 1982–83. But the increase that I now propose will be more than offset by other changes in costs, and the total will therefore be £114.9 billion.
§ Total public sector capital spending is next year planned to be about the same—£11½ billion—as expected this year. The plans allow for new investment by nationalised industries—including that financed from their own resources—of over £7½ billion in 1982–83, some 26 per cent. higher than the outturn now expected in 1981–82, and 40 per cent. higher than in 1980–81.
§ Taking account of measures which I shall be announcing a little later, spending on construction is expected to rise by 14 per cent. to £10¼ billion in 1982–83. In particular, housing investment, and work done on water and sewerage projects, should be higher in real terms next year than this. In all these ways the Government are planning for the continued improvement of public sector services.
§ For the first time we have published figures for the whole survey period in cash. Following the Budget changes, the planning totals for later years are £120 billion for 1983–84, and £128 billion for 1984–85, in cash. The 738 Contingency Reserve, of £4 billion and £6 billion respectively, which is included in the figures for each of these years, has been set to give realistic totals in a cash planning regime.
§ The programme figures are provisional and will be reviewed in future surveys. The starting point will be the cash programmes resulting from this afternoon's announcements. The figures will not be automatically increased if inflation turns out to be higher than expected. Any alteration will be a matter of deliberate political decision. That is the essence of cash planning.
§ I foreshadowed these developments in my Budget speech last year. I am confident that they will help us to keep expenditure under control.