Today I want to explain how these two can complement one another. A modern, flexible economy is an uncertain place for working people, with more job changes and retraining. People need to be reassured more than ever before that, through thick and thin, their health will be looked after, their children educated, and a safety net provided for their old age and periods of involuntary unemployment. In this way, a strong welfare state can complement, not hinder, more flexible markets by reducing fear of change and opposition to it. But that does not mean that the welfare state can be allowed to expand unimpeded.
Big government is out - limited government is in.
I expect to achieve this by 1997-98 and that will be an important milestone. The Prime Minister and I have both said that we will achieve that target and we have both said we will then aspire to reduce it further. The last three public expenditure rounds were some of the toughest since the Second World War. My last Budget cut taxation, cut public spending to pay for it, and increased spending on schools, the NHS, and the police service. That is a combination that only good Government can deliver.