VOTE OF CREDIT, 1945. (Hansard, 24 January 1945)

§ The Chancellor of the Exchequer (Sir John Anderson)

In commending this Vote to the House it will be appropriate that I should give hon. Members some little indication about the financial implications of this Vote, as well as of the Vote which has just been passed, and I hope I am right in assuming that it will be in Order for me to deal with the general situation to cover the ground of the two 839 Votes. The first Vote relates to the current financial year which ends on 31st March next, and represents our requirements, as far as they can be foreseen, for the remainder of this year.

The second Vote, as hon. Members will understand, is to provide for expenditure in the opening months of the year beginning on 1st April. This latter Vote represents, in fact, little more than a sum on account of the requirements of the new financial year, and it has to be passed before the year opens in order that the money may be available on the 1st April. Accordingly that vote is put at the customary figure of £1,000,000,000 and, again according to custom and for the general convenience of the House, it is presented at the same time as the concluding Vote for the old year. On the present occasion, Mr. Speaker, it happens that the final Vote for the expiring financial year—perhaps I ought to say, what I hope will be the final Vote for the year—is also put at a figure of £1,000,000,000, but in this case the sum represents a definite estimate—as good an estimate as we can make—of probable requirements in a specified period.

Hon. Members may recollect that when the last Vote was taken in October last, I stated that it would probably cover our expenditure for war purposes up to the end of this month. Events have borne out the forecast very closely, and it now appears likely that the resources made available from our existing Vote of Credit will be exhausted within a day or two of the end of this month. As I mentioned on a corresponding occasion about this time last year, it is exceptionally difficult at this stage in the financial year to estimate with any certainty what our requirements in the last two or three months of the year are likely to be. During recent weeks our daily expenditure has averaged a daily rate of approximately £14,250,000, of which about £12,500,000 a day has been on the fighting and supply Services. However, these are only averages spread over a period in which the actual daily and weekly expenditure has fluctuated very greatly, both by reason of heavy and irregular items of expenditure, and by the incidence of equally irregular receipts in connection with trading and similar services. In dealing with a strictly limited period such as that with which we are 840 now concerned, average rates of past expenditure cannot obviously be relied upon with complete confidence as a guide to future possibilities. Again, experience in previous years has shown that, apart altogether from the fluctuations to which I have referred, the average rate of expenditure itself rises in the final stages of the financial year.

There is one further point which has to be taken into consideration at this stage. As I explained at this time last year, the expenditure chargeable to the accounts of a particular year does not necessarily agree exactly with the cash issued from the Exchequer during that year. In war conditions, many Departments have to keep large working balances spread over various remote parts of the world, and it inevitably occurs that, on the one hand, part of the cash issued from the Exchequer goes perhaps merely to augment some of those balances without affecting the chargeable expenditure on the year, while, on the other hand, part of the expenditure charged to the year's accounts may be defrayed out of similar balances in other quarters without affecting the cash drawn from the Exchequer in the particular year.

In calculating the total amount of the Votes required in the year, therefore, it is essential to allow a fair margin to provide for all those various contingencies, and, after the most careful consideration of all the factors concerned, I come to the conclusion that I must ask the House for a further vote of £1,000,000,000, making a total of £5,250,000,000 for the current year.

In the course of my Budget Statement last April, I said that if the war in Europe were to continue throughout the financial year, the Vote of Credit expenditure might be anything between £5,000,000,000 and £5,200,000,000. As hon. Members will appreciate from what I have just said, about the difficulties of estimating the requirements of the last few months of the year, it is rather early yet to say how nearly this expectation will be realised, but I think it will be equally clear from the amount of the Vote which I am now asking the House to agree, that I see no reason to expect any really serious divergence between the out-turn of the Exchequer accounts for the year, and the possible range of figures which I indicated in my Budget speech.

§ Mr. Pethick-Lawrence (Edinburgh, East)

We have listened to the Chancellor of the Exchequer moving the Vote of Credit, and this House, which throughout the war has upheld and urged on the Government not to be sparing in the resources of the country in order to prosecute this war to a successful conclusion and to do so at the earliest possible opportunity, will support him to-day as it has done in times gone by. We realise that the amounts are very large; we recognise that they have been in the main necessary to carry the struggle to a successful and early conclusion; and we can only hope that though it seems unlikely now that the war will come to an end before the financial year, yet the year with which this particular Vote of Credit is concerned—the year 1st April, 1945, to 31st March, 1946—will see the termination of the war in Europe and some reduction, even if it may not be very large, in the outlay that this Vote of Credit covers.