Below is the text of Mr Major’s written Parliamentary Answer on Public Expenditure on 13th November 1987.
Mr. Blunkett Asked the Chancellor of the Exchequer what percentage of the proposed cash increase in public expenditure which he announced on Tuesday 3 November is available to fund new services or facilities, taking into account (a) inflation, (b) pay awards, (c) commitments entered into or spending already being undertaken, over and above the previous public expenditure predictions on which his announcement was based, (d) “overspend” already taking place, (e) demographic changes and (f) announcements of increases made previously by him or other Ministers.
Mr. Major [holding answer, 9 November 1987] The plans published in the Autumn Statement represent increases of about 5 per cent. a year in cash terms in general Government expenditure (excluding privatisation proceeds) between 1986-87 and 1990-91. Excluding the expected effects of general inflation, as measured by the GDP deflator, the real increase is about 1.25 per cent. a year. These plans will enable significant improvements in services and new initiatives in the Government’s priority areas, including the NHS, inner cities, education and prison building, while at the same time reducing the proportion of national income devoted to public expenditure. The precise extent to which these cash plans fund new or improved services will depend on the extent to which public sector managers achieve moderate pay settlements or are able to generate additional resources by securing improvements in value for money.