§ Mr. JenkinTo ask the Chancellor of the exchequer if he will make a statement on the reasons underlying the policy of seeking to reduce United Kingdom public expenditure as a proportion of national income.
§ Mr. PortilloIt is important, as the economy recovers, to reduce public expenditure as a share of national income so as to ensure that the benefits of recovery are not pre-empted by the state. A constantly increasing proportion would impose an intolerable burden on the wealth-creating sector and choke off growth. We need to reduce over time the ratio of public spending to gross domestic product so as to achieve our aim of returning the budget to balance as the economy recovers.
§ Mr. David PorterTo ask the Chancellor of the Exchequer what weight is given to service-specific costs such as health care and medical inflation, education inflation and social service provision inflation in calculating public spending by Departments: and if he will make a statement.
§ Mr. PortilloThe Government do not plan public expenditure in volume terms. However, service-specific costs are one of the many factors taken into account when determining the allocation of the public expenditure total between programmes.