§ I am now ready, and I dare say the Committee is ready also, to begin the examination of the prospects for the coming year. The first subject to claim our attention is the Fixed Debt Charge. I am sure that hon. Members have not forgotten the warning which I addressed to them last year that in future there would undoubtedly have to be a larger allocation to the Fixed Debt Charge in order to provide for Debt reduction on a more appropriate scale, and also to cover the estimated average cost of interest on Treasury Bills and Savings Certificates over a period of years. At the time when I uttered that warning short-term interest rates stood at a level which appeared abnormally low, and I did not anticipate that there would be any considerable redemption of Debt during the year. As a matter of fact, however, there has been no important change in conditions during the past twelve months. Treasury Bills have remained at the extremely low average rate of about 12s. 6d. per cent., and the encashment of Savings Certificates has actually been lower than it was in 1933. Partly in consequence of this, and partly as a result of the Budget surplus, there has in fact been a redemption of Debt by £20,000,000, and in these circumstances I have felt justified in retaining the Fixed Debt Charge at the same figure of £224,000,000. If the interest rates on Treasury Bills continue to remain at anything like their present level, that figure ought to contain something available for Debt redemption out of revenue, but I think perhaps that it would be advisable, in order to guard against contingencies, to ask Parliament to give me powers again to borrow for the purpose of the contractual Sinking Funds.
§ There are three other smaller items charged on the Consolidated Fund: Northern Ireland, which I put at £6,750,000; Miscellaneous Consolidated Fund Services, £3,700,000; and the payment to the Post Office Fund, which in accordance with the out-turn of 1934, will be £1,130,000. That brings the total for Consolidated Fund Services up to £235,580,000.
§ The Estimates for the Supply Services are already known to the Committee. They amount to £490,390,000. But there are several items which are not included 1623 in that. There is the subsidy for beet-sugar, there is the cattle subsidy, and there is the increased cost of unemployment assistance, all of which will require Supplementary Estimates later on, and although, as usual, I expect that there will be savings available to make some set off against these charges, I think it is only prudent to provide an additional margin which I may put, in round figures, at £4,000,000. The Supply Services, therefore, for 1935, will cost £494,390,000 If that figure be compared with the original Estimates for 1934, the Committee will see that there is an increase of very nearly £25,000,000.
§ That is a very formidable figure. It is not due to any relaxation of control over administration. It is accounted for by certain definite decisions which have been approved by Parliament. I have had to provide £10,500,000 extra for the deficiencies in the Army and Navy, and for the increase in the Air Force, and I have to provide £14,500,000 extra for civil and social services. Part of that last increase is due to the fact that the restoration of cuts in salaries and wages only operated last year for nine months, whereas, of course, now we have to provide for 12 months. Then we have also to take account of the automatic increases in certain items like old age pensions. But the two main causes of the increase are the additional £4,500,000 required for the industries of shipping and agriculture, and the extra £5,000,000 which must be provided for the unemployed, chiefly in connection with the provisions of the Unemployment Act of last year. I do not think that hon. Members will regret having eaten this part of their cake, and I am sure, therefore, they will be neither surprised nor resentful to find it no longer figures in the fare on the table.
§ Outside the ordinary expenditure there are two self-balancing items— the Post Office and the Road Fund. The Post Office Vote shows a substantial increase at £64,000,000, due partly to the restoration of cuts, and partly to the expectation of a general expansion of business, which is always a welcome sign of more active trade. The Road Fund I put at £26,500,000, which is very near the receipt in 1934, but exceeds the estimate for last year by £2,250,000, although it includes the full effect this year of the 1624 reduced licence duties which came into operation on 1st January last. Omitting these two self-balancing items, I can summarise the expenditure as follows:
| Consolidated Fund Services | £235,580,000; |
| Supply Services, including the margin of £4,000,000 | £494,390,000, |
| making a total or ordinary expenditure of | £729,970,000 |