§ The financial year through which we have just passed was a year in which got steadily better as it proceeded. Trade, both home and foreign, improved, unemployment, though still grievous, decreased, and Government securities steadily appreciated. A very striking indication of the general tendency is to be found in the Post Office savings banks deposits. In January, February and March of last year withdrawals considerably exceeded deposits, while in the corresponding three months. of the current year the deposits exceeded the withdrawals by more than £1,300,000. The Exchequer itself shared in the improvement, and has given us a result which I think must have exceeded the wildest hopes of that confirmed optimist my right hon. Friend the Member for Hillhead (Sir R. Horne), and certainly far exceeded the prophecies of some of-his critics last year.
§ Hon. Members have the figures before them on the Blue Paper. The Committee will remember that last year's Budget. Estimates were balanced at, in round figures, £910,750,000. In the actual result the Revenue total has exceeded the estimate by about £3,250,000—a very close approximation to the original estimate, although there are considerable differences in detail. The expenditure, after providing out of Revenue for the statutory Sinking Funds which my right hon. Friend contemplated might have to be borrowed, has been £812,500,000 and there has thus been a surplus of £101,500,000, which has gone to the reduction of debt.
§ In some quarters it is thought that the surplus of last year is still at our disposal, but this is a misapprehension. In pre-War days the surpluses were small. For the ten years previous to the War the highest was £6,500,000, and there was no difficulty in taking such amounts from the market and keeping them in the Exchequer balances. But with the large surpluses of modern times any such practice would be impossible. To hold 1723 up in the Exchequer a surplus of £100,000,000 or even £50,000,000, would produce a crisis of the greatest severity in the money market, and, in fact, would make it impossible to collect the Income Tax revenue in the last quarter of the year. Consequently, in the Finance Act, 1920, provision was made to enable the Treasury to apply surpluses as they accrued to the redemption of Debt. The effect of this procedure is that. the Treasury can apply its surplus receipts forthwith to a reduction of Debt without keeping them idle in the Exchequer, and thereby not only avoid a loss of interest, but, what is even more essential, the excessive stringency in the money market during the most important period of the collection of the Imperial taxes.
§ There is a further point, and a most important one, to be borne in mind. The term "debt reduction" is sometimes used as though it referred to something infinitely remote and as though provision for that purpose tended to cripple the resources of this generation to ease the circumstances of our grandchildren. Nothing could be further from the truth. There will be plenty of debt for our grandchildren to deal with, but equally debt to-day is insistent, and knocking at the door of this generation. Each year since the War, this year, and for many succeeding years, obligations are maturing obligations which, if not converted, must be paid off in cash. I have had a table (No. 4 on the Blue Paper) specially prepared to show hon. Members the position. This is a new situation in the finances of the country. Students of the subject will remember the discussions which used to take place if there chanced to be a million or so of Exchequer Bonds maturing in a year. How best could so troublesome a situation be met? Now we are dealing with hundreds of millions over a sequence of years. We are fortunate indeed if by a, series of events unforeseen and unforeseeable, the revenue of last year has done something, to mitigate this year an anxiety that is and must be constant and sustained.