Skip to main content

Public Expenditure

Volume 981: debated on Thursday 27 March 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

asked the Chancellor of the Exchequer what is the per capita saving to the taxpayer of each £10 million reduction in public expenditure.

There is no unique relationship between reductions in public expenditure and the effect on taxpayers. Any estimate made would involve numerous assumptions about the types of expenditure involved, overall macroeconomic policy and the response of the economy in general. Moreover, it would be subject to wide margins of error and therefore potentially misleading. It is, however, obviously true that within some aggregate revenue or public sector borrowing constraint lower public expenditure permits taxes to be lower than they would otherwise be.