Public Expenditure (Hansard, 5 February 1986)

HL Deb 05 February 1986 vol 470 cc1132-4 1132

§ 2.46 p.m.

§ Lord Molloy
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Question was as follows:

§ To ask Her Majesty's Government what has been the level of public spending as a percentage of the gross national product from 1978 to the end of financial year 1985.

§ The Secretary of State for Employment (Lord Young of Graffham)
My Lords, public expenditure is normally calculated as a percentage of national income by using gross domestic product as the denominator. With permission, I will circulate the full figures in the Official Report. The figures show that the percentage has been declining steadily since 1982–83. In that year it stood at 46½ per cent. In 1985–86 it is estimated to be 44½ per cent.

§ Lord Molloy
My Lords, I am grateful to the noble Lord the Minister for that reply, which will seem to obscure more than it reveals until we see what appears in his written reply. Would it be fair to say that, by and large, public expenditure has over the past five years increased annually?

§ Lord Young of Graffham
No, my Lords, it would not be true to say that. Public expenditure has been decreasing annually since 1982–83.

§ Lord Williams of Elvel
My Lords, can the noble Lord very kindly give us figures for public investment—which is a major component of public spending—calculated as a percentage of the gross domestic product, as he requests, for the periods that my noble friend Lord Molloy refers to?

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§ Lord Young of Graffham
My Lords, I can certainly produce those figures but, alas, not at this moment since it is another question. But I must tell your Lordships that it is not public investment that is important but the total of investment. Last year fixed capital investment stood, I believe, at £60 billion and next year it will be up at £64 billion. Both figures are records.

§ Lord Williams of Elvel
My Lords, I am sorry to return to the Dispatch Box, but perhaps I can help the noble Lord. Public investment on the national accounts basis percentage of gross domestic product in 1979 was 6.5 per cent. In 1985 it is estimated to be 4.7 per cent. In real terms, public investment is estimated to decline by nearly 20 per cent. Will the noble Lord please accept, for once, that the cuts in investment have bitten deepest in public investment where the national need is greatest?

§ Lord Young of Graffham
No, my Lords, not in the slightest. For one thing, a Question on public spending is a long way indeed from public investment; and, secondly, I could contest the noble Lord's contention.

§ Lord Molloy
My Lords, if the noble Lord says, as he did, that it has been declining since 1982–83, why cannot he answer the Question and give us the percentage? How does he know that what he is saying is correct?

§ Lord Young of Graffham
Because, my Lords, the question asked by the noble Lord, Lord Molloy, was about the percentage of the gross national product from 1978 to the end of the financial year. It had nothing whatever to do with investment.

§ Lord Avebury
My Lords, does the noble Lord not agree that in order to obtain a true picture of the amount of public spending in terms of resources devoted to public purposes as a percentage of the gross national product, one needs to exclude transfer payments? Will the noble Lord's table, when printed in the Official Report, also give public spending net of transfer payments as a percentage of the GNP?

§ Lord Young of Graffham
My Lords, I can of course gladly supply that information, and I shall.

Lord Bruce of Donington
My Lords, in his Answer the noble Lord was kind enough to give the figures from 1982 onwards. Will the noble Lord reply verbally to the Question on the Order Paper, which mentioned 1978? Will the noble Lord also state what the percentage is now and the percentage as it was in 1978–79?

§ Lord Young of Graffham
My Lords, the Question actually asked was about each year from 1978 until the end of the financial year 1985, and as I have offered I shall provide all the figures in the Official Report. If the noble Lord wishes me to waste the time of your Lordships' House by reading out the full table of figures, of course I shall do so.
The figure for 1978–79 was in fact 43 per cent.; for 1979–80 it was 43½ per cent.; it was 46 per cent. for 1980–81; 46½ per cent. for 1981–82; 46½ per cent. For 1134 1982–83; 46 per cent. for 1983–84; 45½ per cent. for 1984–85; 44½ per cent. for 1985–86; and as a gratuitous piece of information it was 48½ per cent. for 1975–76.

§ Lord Harmar-Nicholls
My Lords, since the questions put to the Minister by the noble Lord opposite seemed confidently to imply that he knew the answers already, can we be told what was the point of putting down the Question in the first place?

§ Lord Young of Graffham
My Lords, I occasionally have difficulty in discerning it myself.

§ Lord Molloy
My Lords, may I now reveal the purpose of the Question, which the general public are entitled to know since they were told that the Government would steadily decrease the percentage of public spending? Will the noble Lord now explain why the Government said that they would decrease public spending, when in point of fact it has increased?

§ Lord Young of Graffham
My Lords, in the first year the present Government were not in office—that was 1978–79—but as regards succeeding years it is true that for the next two years the percentage did increase. There were slightly exceptional circumstances, and in each year since then the percentage has either remained the same or has decreased.

Lord Paget of Northampton
My Lords, after all this discussion may we take it that the noble Lord subscribes to the proposition that there are lies, damned lies and statistics?

§ Following are the figures referred to above:

GENERAL GOVERNMENT EXPENDITURE^* AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT
	1978–79	1979–80	1980–81	1981–82	1982–83	1983–84	1984–85	1985–86
estimated
	outturn	outturn	outturn	outturn	outturn	outturn	outturn	outturn
Total general government expenditure	43	43½	46	46½	46½	46	45½	441½
Spending on goods and services	22½	22½	24	23½	23½	23½	23½	23
^*General government expenditure, the measure of public expenditure used in calculating this percentage, covers spending by central and local government. It differs from the public expenditure planning total, for example, by excluding part of public corporations spending and including debt interest payments. Further details are in table 2.19 of Volume II of the public expenditure White Paper (Cmnd. 9702) and in an article in Economic Trends, August 1985.