§ 4.19 p.m.
§ The Chancellor of the Exchequer (Sir Kingsley Wood)The Budget of April last has only just been passed into law, but the Committee is generally aware of the reasons why it is now necessary to review again our financial position and to take certain immediate action. In the April Budget a total of £2,000,000,000 was given, with all reserve, as a provisional round figure for our war expenditure during the current year. It was then stated that under present conditions any estimate made for so long ahead is bound to partake largely of the nature of a guess. It depended—and any future estimate must depend—upon the amount of manpower available for production, the supply of raw materials and many similar factors. After adding to the round figure of £2,000,000,000 the cost of the Debt service and ordinary Supply services, the total figure of £2,667,000,000 was reached.
The revenue available towards that expenditure on the pre-Budget basis of taxation was estimated at £1,133,000,000, but the yield, in the current year, of the additional taxation imposed by the April Budget brought the figure up to £1,234,000,000. The deficit on this basis to be covered by savings or other means was, therefore, £1,433,000,000. It is plain that our war expenditure during the current year will be considerably greater than was assumed in April. While we all welcome it as a real and tangible evidence of a greatly accelerated war effort, it certainly presents further and difficult problems in relation to our national finances.