Counting the Family Silver: The Public Sector’s Balance Sheet z I95 7 to I987 zyx JOHN HILLS* ‘The louder he talked of his honour, the faster we counted our spoons’ (Ralph Waldo Emerson) i. INTRODUCTION Policies which affect the balance between the public sector’s assets and its liabilities have been major concerns of the last few years. Instead of a Public Sector Borrowing Requirement (PSBR), we currently have a Public Sector Debt Repayment (PSDR), and much is being made of the consequent reduction in the nominal value of the National Debt. Public sector capital spending has been under tight restraints. Significant parts of the public sector’s assets have been sold through the privatisation of former public corporations like British Telecom and through the sale of council houses under the Right to Buy. Substantial amounts have been received from the wasting asset of Government revenues from North Sea oil. The link between the state pension and the growth of earnings has been broken, while the rules affecting people’s future pensions under the new State Earnings Related Pension Scheme (SERPS) have been changed. zyxw * The author is Co-Director of the Welfare State Programme of the Suntory-Toyota International Centre for Economics and Related Disciplines at the London School of Economics. The work on which this paper is based was funded by the Economic and Social Research Council as part of its Public Expenditure Research Programme. zyxwvuts An earlier version was presented to an ESRC seminar of that programme in December 1988. The author is very grateful to Bill Robinson and other participants in that seminar for many helpful comments and suggestions, to Chris Gordon and Beverley Mullings for help in its preparation and to the Central Statistical Office for kindly providing background information on their published calculations.