Public Expenditure

HC Deb 05 February 1976 vol 904 cc706-7W

41. Mr. Lane

asked the Chancellor of the Exchequer what steps he is taking to lessen the total call made on national resources by the public sector.

Mr. Joel Barnett

The results of the Government's review of public expenditure will be published in a White Paper later this month.

Mr. David Howell

asked the Chancellor of the Exchequer to what extent the Governments of the United Kingdom, Japan, France, Germany, Italy, the Netherlands and Belgium implemented increases or reductions in planned levels of public expenditure for 1974 and 1975 in response to the energy crisis of October 1973.

Mr. Joel Barnett

Certain decisions involving expenditure were made by the British Government of the day specifically to meet actual and prospective energy shortages in the winter of 1973–74, but these were small compared with other changes in expenditure plans made at that time and later in relation to a number of problems—in, for instance, the demand management and balance of payments fields—which were to a varying degree exacerbated by the energy crisis. It is not possible, therefore, to quantify the extent to which changes in expenditure plans constituted a response to the energy crisis, even in this country.

Mr. Lawson

asked the Chancellor of the Exchequer what was the total increase in public expenditure between the financial years 1964–65 and 1974–75, expressed as a percentage of the total increase in gross national product over the same decade.

Mr. Joel Barnett

The increase in public expenditure at current prices between 1964–65 and 1974–75 was 65 per cent. of the increase in gross national product at current factor cost over the same period. However, this figure is affected by the rate of inflation as well as shifts in relative prices, and public expenditure includes transfers as well as purchases of goods and services. The ratio requested cannot, therefore, provide a measure of the proportion of the increase in resources taken by the public sector.

Mr. Luard

asked the Chancellor of the Exchequer what was the average annual increase in public expenditure in real terms between 1970 and 1974; and what is the estimated rate of increase for the four years from 1975 onwards.

Mr. Joel Barnett

The average annual increase in public expenditure, including debt interest, in real terms between 1970–71 and 1974–75 was 5.1 per cent. The White Paper on public expenditure to be published later this month will include projections to 1979–80.