§ At this point the Committee may remember that, in consequence of the Coal Subsidy, we had a deficit last year of £14,000,000. This would probably not be considered a deficit in any other country in the world. It means that we are paying our way and paying off very large sums of debt. It does not mean that we have spent more than we raised in taxation. It means that we have, in effect, reduced the £50,000,000 statutory new Sinking Fund to £36,000,000, and we have to that extent fallen below the programme of debt redemption which we had set before ourselves. I am certainly not going to argue as if it wore an immutable law that in all circumstances the only way to improve credit and to create favourable conditions for debt conversion operations is to pay off ever increasing quantities of debt. I am not making any such general claim. It is not the only way, but it is one way, and it is a very good way. Every repayment of debt liberates an equal sum for the support of industry and commerce.
§ At the present time especially we have to consider how last year's deficit occurred. I share the responsibility in full for the Coal Subsidy. I was strongly in favour of it. Whatever may happen in the immediate future I am certain that what we did last August was only right and prudent. But every subsidy is a questionable policy. A subsidy that is paid out of borrowed money or which leads the national finance into a deficit or which prevents the carrying out of financial policy deliberately conceived is not questionable, it is vicious. It would be altogether too easy for us to get into the habit of turning awkward corners or delaying unpleasant ordeals by simply whittling away the provision which successive Parliaments, Governments and parties have considered necessary for the redemption of the National Debt. The only check upon such expedients as subsidies, however legitimate upon occasion they may be, is the finding of the money out of revenue, annual or occasional.
§ There are many features of our national life which rightly give rise to misgivings and anxieties, but no one, even here at home, denies that we have 1719 maintained a very strict system of finance. The Coalition Government, the Conservative Government, the Labour Government—I gladly recognise the orthodoxy of the right hon. Member for Colne Valley—all differing on so many other issues, have with equal consistency maintained strict and severe finance. Moreover, we are quite strong enough to do it. There is no need, and there would be no excuse to show failure or weakness in carrying out our purposes. I must, however, pray in aid the surplus of £4,000,000 which resulted from the Budget of my right hon. Friend the Member for Colne Valley, and which in conformity with the law was devoted to the old Sinking Fund. We have therefore devoted in 1925–26 not £36,000,000 but £40,000,000 to debt redemption out of revenue. We are £10,000,000 short. In order to fill the gap and maintain in effective operation the £50,000,000 Sinking Fund, I propose to increase the new Sinking Fund for this year from £50,000,000 to £60,000,000. I am sorry indeed to offer such austere fare to the Committee, but I am sure, having regard to all the circumstances of the present time, it is the right thing to do. Thus we shall in fact have paid the whole £23,000,000 of the coal subsidy out of current resources without impairing the £50,000,000 Sinking Fund provided for the redemption of Debt. That is the object upon which all my efforts during the last six months have converged. It is a limited objective, it is a modest objective, but such as it is it has been attained.