I note the hon. Gentleman's question and, of course, I shall he referring to it later in my remarks.
So far as home demand is concerned, we have insisted that any increase must come from investment. Neither private nor public spending can be allowed to grow until our economy is once more in balance. Despite political temptations at least as powerful as those to which previous Governments succumbed at similar stages in the cycle, we have maintained our determination to see that the increase in output goes where it is needed. The rate of consumer spending has not changed significantly for more than a year. The savings ratio remains high, at 13 per cent.
Expenditure by the public sector is now levelling off as forecast and, following the July measures, it is due to fall somewhat next year in real terms. Thereafter, it will take a steadily reducing proportion of available resources. We shall give priority to support of our industrial policies within the total of public expenditure available.
This priority was fully reflected in the decisions which I announced in the House in July. The cost of the measures we have since approved to relieve unemployment and to support industry will be within the limits set by the contingency reserve. The extensive application of cash limits to regulate expenditure in money terms combined with our refusal to sanction expenditure beyond the totals set for individual programmes and the contingency reserve should ensure that we have the most effective control of public expenditure achieved in Britain for many years.
I know very well the difficulties which this entails, in particular the problems involved for the local authorities. But the improved information system and the new methods of consultation have paid good dividends in our joint effort to bring local authority current expenditure this year more closely into line with the White Paper figures.
We are now approaching the discussions which will lead up to the Rate Support Grant settlement for 1977–78. Everyone involved in this operation knows very well that we mean to do everything possible to bring current expenditure for that year back into line with the White Paper plans and that the grant settlement will be directed to that end.