The fact that the welfare state helps to underpin a flexible economy does not mean that it can be allowed to expand unimpeded. Spending on social security, health and education account for over 60 per cent of total public expenditure, so it imperative to contain spending on these services if we are to reduce public spending over all. Getting the share of public expenditure down 6. I have constantly asserted ever since I became Chancellor that in today's competitive global economy the share of a nation's output that is taken up by the state must be checked. I am delighted that more and more people keep agreeing with me.
Big government is out - limited government is in.
Reducing the share of national income taken by the State is the only way to create a low tax environment where the private sector has the incentive to generate the jobs, the investment and the wealth that will make people and their families more prosperous. Public spending as a share of national income is bound to vary from year to year but under this government's policies over the past sixteen years the trend has been unambiguously downward. This year I expect total public spending to be 42 per cent of the national income. There is often ill-informed criticism of the increase in the share of public spending in the early 1990s. What is clear is that it rose to a lower level than at comparative periods in earlier recessions.