Deputy Yates knows that the ESRI also allows for modest growth in services.
Practically all the increase in public service spending in 1994 relates to pay and social services and £451 million of the net spending of £557 million will be spent in this area. That is where the difficulty arises. In most countries of the Community with the recession and zero or minus growth in the economy during a three year period, the cost of social services, and in our case, the cost of social welfare—I define social services as social welfare, education and health — has increased. In one year an additional 30,000 joined the dole queues and money must be provided for them. The shortfall in the finance of the health services caused a great deal of rancour in the House and we provided additional resources for them. The other Departments have contained their spending. Any increase in public expenditure is of concern to the Minister for Finance and I am doing all I can about it.
I do not believe we can totally commit ourselves to following tight fiscal policies regardless of what is happening in Europe. We certainly will keep finances as tight as we can. If the Deputy looks at the statistics for the 1994 projected EBR and the budget deficit across the Community, he will see that we are second lowest after Luxembourg. Our projected figure of 2.8 per cent compares favourably with the figures for most other countries, in Portugal it is 6.5 per cent; in the United Kingdom it is 6.3; and the European Union average is 5.7. We do not want to become a one item agenda Government with controls on public expenditure squeezing the life out of the services. We need to watch public expenditure and we have kept a far tighter rein on public expenditure than our partners.
I would have preferred if pay increases under the Programme for Competitiveness and Work were lower but they are less than in most other European countries. The projected rate of inflation for this year is 2.5 per cent and next year the increases in pay will be far lower. Pay levels and numbers in the public service have to be kept under control.
Deputy Yates will agree that he and I are probably the only people who believe in this. During the two day debate on the Finance Bill demands were made for an increase of £970 million in public expenditure and there was not a suggestion from anyone, including the Deputy, as to where we might cut back even though I continued to invite Members to make suggestions.