§ Mr. Ridley
asked the Chancellor of the Exchequer if he will analyse and quantify, where possible, any significant differences between the coverage of public expenditure, adopted in Command Paper No. 6721-I and the definition of general Government expenditure used by the OECD.
§ Mr. Joel Barnett
There are two main differences between the coverage of public expenditure adopted in Cmnd. 6721-I and the coverage of general Government expenditure on the basis of the OECD published tables; the new treatment of debt interest in Cmnd. 6721-I, and the exclusion, on the OECD basis, of general Government expenditure on capital grants, loans and other financial assets, which is included in Cmnd. 6721-I. Other differences arise because public expenditure includes the capital expenditure of public corporations other than nationalised industries, which is not in the figures of general Government expenditure, and because the OECD definition of general Government expenditure differs in some respects from that used726W in the United Kingdom national accounts. The differences between Cmnd. 6721-I and the OECD basis can therefore be shown best by reference to the definition of general Government expenditure used in the United Kingdom national accounts. The table shows a translation, for the year 1974, from public expenditure—Cmnd. 6721 basis—via general Government expenditure—United Kingdom national accounts basis—to general Government expenditure—OECD national accounts basis.
(£ million) 1974 Public expenditure (Cmnd. 6721 basis) 36,533 Plus Interest receipts and interest provisions from trading surpluses and rents, deducted from above 2,675 Minus Capital expenditure of public corporations (other than nationalized industries) not financed from general Government capital grants and loans. -167 General Government expenditure (United Kingdom national accounts basis) 39,041 Minus General Government capital transfers and net expenditure on loans and company securities -3,508 Plus Certain fees paid by persons, netted off from general Government expenditure on United Kingdom definition 17 Plus Social benefits corresponding to imputed social contributions 932 Substitution of capital consumption for the imputed rent of non-trading fixed assets -74 General Government expenditure (OECD basis) 36,408