§ Coming to the debt itself, the results of last year's operations have shown a substantial diminution of the nominal dead-weight charge. On the 31st March, 1.124, it stood at £7,680,000,000, while on the 31st March last it had been reduced to £7,646,000,000. Floating debt has been reduced by £32,250,000, and external debt by £4,000,000. The successful work of the public thrift organisations, particularly the National Savings Committee, has continued. It has continued in spite of severe unemployment and obstinate trade depression. Saving certificates produced £32,000,000 gross in the present year, and showed a net increase over repayments of just under £3,000,000. Savings Bank Deposits also showed an increase of £11,000,000, in spite of the serious adverse factors which I have mentioned.
§ Taking a wider view, no country has ever made the exertions which this country has made since the War to pay its debts and to meet its obligations with strictness and punctuality, and few countries have reaped a more tangible 51 reward. Making allowance for the fact that the American debt interest was not paid for the first few years after the War, and comparing like with like, the interest on the National Debt has been reduced in the five years since 1920 by up wards of £70,000,000 a year, and the rate of Government borrowing has fallen from.
§ per cent. to 42 per cent. This great fall in the rate of money for the Government has enabled a whole series of conversion operations of a highly profitable character to be undertaken or envisaged. Even in the last few months, the three minor operations for which I have been responsible have resulted in a permanent diminution of the annual debt charge of £22,500,000.
§ Much larger conversion operations impend within the lifetime of the present Parliament, and from these important savings may be realised by the taxpayer. But they will only be realised by strict adherence to the principles of sound financial policy, to the maintenance of which. I freely admit, the party opposite contributed during their period of power. If those principles are maintained and this process of debt redemption continues, a speedy and a substantial reward will be reaped by the taxpayer and the benefit will come to hand even before the present Parliament has separated.
§ It is most necessary that this policy of debt repayment should continue. My right hon. Friend the Prime Minister, when he was Chancellor of the Exchequer two years ago, prescribed a figure of £50,000,000 a year as the ultimate total of the new Sinking Fund and he embodied in statutory form his proposal that the new Sinking Fund should be fixed at £40,000,000 in the first instance and then rise by yearly instalments of)5,000,000 to this figure of £50,000,000. It falls to me to provide the final £5,000,000 this year, as I shall do, to raise the new Sinking Fund to its statutory limit of £50,000,000. But that is not all that we have done in the direction of discharging war liabilities. We have been paying off our war pensions liability on a gigantic scale. When the War stopped, the present capital value of the War pensions liability was estimated to have been at least £1,000,000,000, and the maximum annual charge was £110,000,000. We have 52 now reduced that liability owing to the fact that we have met every obligation as it arose, and paid the expenses of every year from the revenue of that year. We have now reduced that liability to a present capital value of £760,000,000, and the annual charge has fallen to I67,000,000 a year. Strict perseverance in this policy of paying for War pensions every year instead of funding them or spreading them, as has been suggested in various quarters—a policy in itself by no means indefensible—will result in relief to the taxpayer year by year of £2,000,000 or £3,000,000 until, finally, the whole liability is extinguished altogether or sinks to inappreciable proportions through the deaths of the pensioners. That is an important fact and a potent fact, which is often not noticed or not dwelt on when we describe the efforts which this country has made to free itself from the liabilities of debt in which it;was involved during the course of the great War, and it is a fact which I shall ask the Committee to bear in mind in connection with some considerable proposals which T shall make to them at a later stage in my remarks. That is all that I have to say about the finance of 1924; that is the tale of the year that is done as far A's I need supplement the Blue Paper.