TRRRREFINEMENTENKOO
35.
In
If we are to maintain stability in our public finances, expenditure plans must be related to our longer-term prospects rather than shaped on the basis of just two years of
exceptional revenue yields. It follows, therefore,
that any adjustments in 1988-89 should relate primarily to revenue.
the light of the results we have achieved and taking account of
our projections over the period of the Medium Range Forecast,
some further lowering of tax rates is thus possible; it has been
earned by the efforts of the community. But you will not be surprised to learn that the measures I shall outline to you
later retain a proper element of caution dictated by the
uncertainties against which we must continue to guard.
Strategy for expenditure
36.
ital
Average annual growth in Consolidated Accountant expenditure over the forecast period is projected to be 5.4ir cent
This is just a little higher than the 5.0
real terms.
ep contained in my 1987-88 budget strategy, but remains within the
trend growth rate assumption for GDP.
37.
It is important not to lose sight of the fact that
such a growth rate
rate in expenditure means that public sector
expenditure will almost double by the end of the next decade. As
we face this overall and perhaps inevitable growth in spending,
we must pay particular attention to recurrent expenditure; I have in mind staff and departmental expenses. We must ensure that these continuing and ever increasing commitments do not exceed our longer-term ability to finance them. Against this
background, I draw attention to the fact that the detailed estimates which I present today make provision for growth in
per cent the size of the Civil Service of some 4 in 1988-89 (17). This
is largely due to the staffing impact of some major new medical
facilities and the build up of the
the Police Tactical Unit in
preparation for taking over the work of the British garrison. These and other factors push staff growth beyond our target of 2.5 per cent
ар
20 a year.
(17) After allowing for project slippage and savings from further Value for
Money studies.
19
/38. There
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