§ Now I must return to the actual problem presented to me by the potential inflationary gap which, as the Committee will remember, I place in the neighbourhood of £500,000,000. I must first consider to what extent it would be reasonable to expect an increase in genuine new private savings. I cannot expect large increases in undistributed profits of companies, for some are faring ill and others are severely restricted by Excess Profits Tax. I have to look mainly to the savings of individuals. In my estimate of the gap I expressly included for the moment the increase to be anticipated from this source. Obviously it would be over-sanguine of me to imagine that increased private savings alone would fill the gap, but experience up to date would certainly justify me in expecting the National Savings Campaign to show still further improvement, despite any additional taxation. The growth of private savings, through the stimulus provided by the National Savings movement, has been remarkable. It is, however, no greater than one would ex- 1323 pect when one reflects on the wonderful work which has been done by Lord Kindersley and his helpers, and I do not regard any part of the increase as due to inflationary causes. I judge that private savings are now accumulating at a rate nearly double the rate in the first year of the war, which was in itself an enormous increase on peace-time standards. This is a remarkable and welcome contrast to what was raised in a similar period during the last Great War, but we shall need still greater efforts.
§ Domestic expenditure in the next 12 months is likely to exceed the total of such expenditure in the first 18 months of the war. While personal savings, leaving out companies and the like, are now running at a very gratifying rate, I will need from this source in the coming year a still greater sum, and I need it in genuine new savings. I am sure that a further increase is within the powers of the Savings Campaign. War Weapons Weeks have played an important part in the War Savings Campaign lately, and I am grateful to all those throughout the country who have helped to make them a success. These Weeks have been the means, not only of raising large sums of money for the Government from all sections of the community, but also of permanently strengthening the whole of the War Savings organisation, thus rendering it better able to discharge its great responsibilities and inducing everyone to spend as little as possible and lend as much as possible. I know that heavy taxation makes things difficult and that we cannot all, having regard to our circumstances, do equally well, but there are factors on the other side. My right hon. Friends the Minister of Food and the President of the Board of Trade have removed, and are removing, many temptations in our way and keeping us on the straight and narrow path.
§ I might at this stage quote a few figures which will serve to indicate that I have good reason for my belief that the Savings Campaign is capable of producing an even higher rate of savings. In the first 52 weeks of the present campaign the average weekly figure of the smaller savings was £8,900,000 and that for the larger securities £12,700,000, a total of £21,600,000 a week. For the 19 weeks since then the smaller savings have risen 1324 to £11,700,000 a week, while the larger investors have found £18,700,000 a week, a total of £30,400,000 a week. While I recognise that the figures for the larger securities include reinvestment and other transactions as well as new savings, the total increase is striking, all the more so because the earlier figures must have, I think, contained considerable sums representing investment of savings of the past. I have little doubt in particular that the amount drawn from the smaller investors to-day represents almost entirely genuine new savings.
§ There is a further figure which is, I think, very significant. During the first three months of the Campaign the sale of single unit savings certificates averaged weekly 261,000 units. In the first two months of 1941 this figure had risen to no less than 1,129,000 units. This is indeed firm evidence of the penetration of the Campaign to the wage earner. None the less with the expansion of production and of the wages bill, I think it is still capable of considerable improvement. The formation of Savings Groups in industry and elsewhere goes on apace, but there is a need both for increasing the active membership and the weekly sums set aside. I know of a case, typical I believe of many, in which less than a year ago the average weekly contribution to the group was 1s. 0£d. for each employé whether saving or not. To-day that figure has increased to 12s. 10d. That is an example which I commend to others. It shows what can be done by energy and by bringing home to every employéthe great need of adequate financial support for the war effort. Taxation, I know, must bear heavily, but I am confident that much more can be done so as to reduce the demand on our supplies and to increase the genuine savings coming to the Government.
§ The effect of the various schemes which are now being put into force to limit the quantity of supplies of various kinds available for purchase should in itself be favourable to genuine increased saving by every recipient of income. Therefore, the Committee will see that I have solid ground for my anticipation that the figures of new savings by both large and small investors will continue to grow. It would be rash of me to attempt to estimate that probable growth with any high degree of accuracy, but for the reasons which I have 1325 already stated, I feel there is good foundation for my anticipation that, even with higher taxation, it is possible to raise in the year a further sum of between £200,000,000 and £300,000,000. It follows that I must base my further proposals on the assumption that a considerable gap remains; it cannot wisely be put at less than a sum of between £200,000,000 and £300,000,000.
§ In my survey I have attempted to take into account all the resources ready to my hand. To find further resources I must, therefore, obviously obtain new taxation, and, in the light of the calculation which I have given, the Committee will see that if I am to deal squarely and adequately with the financial situation, and particularly with the problem of inflation and all that it involves, I must raise new taxation, which, when it is in full operation, will amount to not less than £200,000,000. To allow some margin of safety, I regard it as essential to raise by new taxation something in the neighbourhood of £250,000,000 in a full year.